Umm Muhammed Umar

Financial freedom is considered to be something elusive by most people. In reality, it is more achievable than people realize. Financial freedom means having enough money saved to continue your lifestyle, without being dependent on a monthly salary. You can continue working, even with financial freedom, but because you want to, not because you’re compelled to.

Most people know the panic that sets in when faced with a large unforeseen expense, for example, the bill for an unexpected car repair. However, imagine if that car repair was just an inconvenience; imagine you were able to pay the bill without thinking twice. A week later you have even forgotten about the incident, it affected your financial situation that little. For you it was not an emergency, and was barely a hiccup. The next time a pandemic or recession hits you, and you miss a monthly pay check, instead of panicking relying on the government for a safety net you can focus on the other inconveniences of the crisis, not where your family’s next meal is going to come from. The sense of relief is tangible.

Radio Islam discussed financial freedom with Money Coach and Financial Planner, Nabeel Khan, who defined financial freedom as taking ownership of one’s finances in a way that would allow one to live life on your own terms without the worry or burden of debt. He says that slightly deeper perspective is to look at financial freedom as the ultimate freedom, with enough money coming in, without one having to work fully. He said, “but there are different levels to it, there’s a level of financial independence and financial security, where you don’t have to worry about things like food, utilities, roof over your head, transport and so on.” Khan says there are three levels to financial freedom.

Khan says that the starting point is any one of these: freedom, independence, security. He said, “any financial version of that lifestyle is linked to a goal.” Khan adds, “we all know the importance of goals, breaking those goals down into smaller milestones, and then those milestones into daily tasks.” He says that what we do daily is an accumulation and will add up to something – this applies to everything, not only to money. According to Khan, the emotional attachment to your goal is what one should begin with. He says that when a financial adviser shows up with a piece of paper, the numbers on it are actually meaningless to most people, and no one commits to that which is meaningless to them. He advises that the best thing would be to team up with a coach, to work on your understanding of yourself and to understand what drives you. He says reflect on what’s important to you today, and for your future and set the goals around that. Khan advises, “once you have the goals, you can then work out the cost of each goal, and match it to the timeframe that you want to realize that goal in.”

Some of the potential barriers that people experience in trying to achieve their goals are:

• lack of proper planning
• lack of interest in one goals
• not mitigating risks
• not saving
• not investing
• living on credit

Khan warns, however, that all of these are ‘potential barriers’ are choices that we make that form our habits, and that our habits stem from our beliefs and perspectives about money. So, really, the only barrier then is how much effort we put into what we are working towards financially.

We will face barriers daily, especially as times change. Some are based on our constructs around us and some just suddenly present themselves, the pandemic, for example. Khan says that everyone is capable of planning. He says if we think of a weekend away with our family, we put in the necessary effort and organization, right from sourcing accommodation, to making it back home on time to be able to go to work the next day. He says if we apply those skills to money, we can realize overall financial well-being.