What is financial freedom?

Financial freedom is the belief that a certain amount of savings is the ultimate ticket to living a life you want without worrying about money. However, this often means tight budgets, excessive saving and putting off simple pleasures. That could mean not dining out or not taking a spontaneous weekend getaway just to save money, so that one day you can enjoy these things. But when? What happens if it never comes and our time runs out?

Does financial freedom work?

To answer this, remember that happiness and a fulfilling life go beyond money. I looked at this in my column “Does money buy happiness?” As you can expect, the answer is: “It’s complicated.”

The classic novel The Great Gatsby by F. Scott Fitzgerald explores how lavish parties and the impression of having excess money can imply financial freedom. Though fictional, its message resonates. The plot also uncovers the void that material wealth cannot fill. Gatsby tries to win back Daisy Buchanan, his lost love. He discovers money can’t fix the hurtful past. Similarly, Daisy’s husband, Tom, shows that riches don’t protect him from his own personal troubles. Financial freedom isn’t just about reaching a money goal. It urges readers to explore beyond the pursuit of hard work, savings and investments. 

Let’s move beyond fiction.

What is Ken Honda’s method for financial freedom?

Ken Honda is an expert in money and happiness. His bestselling book Happy Money (Gallery Books, 2019) introduces a unique perspective, in that achieving financial freedom involves a delicate balance of two key components: money IQ and money EQ.

What is money IQ?

IQ stands for intelligence quotient. This focuses on the knowledge of finance, such as investing, budgeting, taxes and financial literacy—the technical side of money. It’s about the know-how for managing money effectively. From a financial freedom perspective, it means earning and growing enough money until we reach a stage where our investment returns and savings can sustain a life without working.

What is money EQ?

Emotional quotient, in contrast to money IQ, revolves around our emotional relationship with money. It is about how money makes us feel, the meanings we attach to it, and its role in our identity. Money EQ delves deep into our attitudes and beliefs towards money and how they affect our well-being. According to Honda, showing your appreciation toward money—thanking it, even—is a vital step towards achieving emotional financial freedom. Honda often says, “when we appreciate our money, it appreciates.” Money EQ involves how we receive, enjoy, share and relate to money.

Finding balance between money IQ and money EQ

To find balance between money IQ and money EQ, Honda suggests inviting the concept of “happy money” into our lives. This notion reflects money that not only funds our needs but also adds a positive dimension to our emotional and psychological wellbeing.


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