What is Financial Freedom [with Jean Chatzky]

This is the first day of our 31-Day Money Challenge. Over 31 days we’ll publish 31 podcasts, each designed to help you move closer to financial freedom. In today’s podcast, we interview Jean Chatzky of the Today Show to gain a better understanding of what financial freedom is, how we can achieve it, and what keeps so many from reaching this goal.

Sponsors: The 31-Day Money Podcast is sponsored by Betterment and Empower. Betterment and Empower are two tools you can use to make investing easier, less expensive, and more effective.

(Personal Capital is now Empower)

What Exactly is Financial Freedom

It goes by a lot of names. Some call it Financial Independence. Others call it being wealthy or rich. Sometimes we just talk about being comfortable. Whatever you call it, Financial Freedom is about having the resources to pursue your life’s purpose without excessive worry about money.

What’s interesting about this concept is that its meaning is different for everybody. It’s not a one-size-fits-all goal. And it doesn’t start with money; it starts with how you want to live your life.

I know people that make six and even seven-figure salaries that have not achieved a meaningful measure of financial freedom. This concept is perhaps best understood from the following story John Bogle recounts in his excellent book, Enough:

At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds, “Yes, but I have something he will never have … enough.”

To me, financial freedom starts when we identify those things in life that really matter. Only then can we understand how we want to live our lives and what resources we’ll need to do so.

Of course, we can also throw out all this philosophical rubbish. For many, the first step toward financial freedom means being able to pay the rent at the end of the month or being able to retire someday.

In this podcast, we get to hear from Jean Chatzky on the topic of financial freedom and happiness.

Topics Covered with Jean Chatzky

• Jean’s view of financial freedom: having enough money to make choices about how you want to live your life
• What financial freedom is not
• Biggest challenge to financial freedom is not knowing how we are spending our money
• How much money is enough for financial happiness
• Financial Freedom vs. Financial Happiness
• The importance of setting financial goals and automating finances

Resources Mentioned in the Podcast

• Leave me a voice mail message with your questions (via Speak Pipe)
• The Seven Habits of Highly Effective People (Stephen Covey)
• Jean Chatzky’s Money School
• Mint.com
• How Much Money Makes You Happy?
• The 10 Commandments of Financial Happiness (Book)
• The 10 Commandments of Financial Happiness (Money Magazine Article)

Day 2: Keys to Setting Financial Goals

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