The 7 Stages of Financial Freedom

What does ‘financial freedom’ mean to you? Is it being able to pay your bills on time without worry every month, or is it having the capability to buy anything you want without putting it on credit? #adulting

In essence, financial freedom is the ability to have enough money so that you can not worry about money anymore. 

Financial Freedom

In our journey to financial freedom, it’s important to tick off the milestones along the way. It’s all and good to never have to worry about moolah, but having such a big and lofty goal can detract us from the small steps we need to take to get there. 

When you break down your journey to financial freedom, you can track progress much easier. You get to visualise how far you’ve come, and take the actions needed to move on to the next stage.

So here are the 7 stages of financial freedom:

1. Dependant

Debt > income 😅. You’re currently earning less than you’re spending, making you still dependent on other people or on debt.2.

2. Solvent

You’ve reached Stage 2 if your spending is lower than your earnings (woohoo!). You’re paying debt on time, meeting your financial commitments and can manage without relying on others. 

3. Stable

Solid as a rock! 💪🏼  Being stable means your income comfortably covers your expenses, so you can save money consistently. You have enough for an emergency fund and short-term savings, and is heading towards paying off high-interest debt (like credit cards).

4. Security

You’re at the Security stage when you can now save more money for long-term goals, no longer worrying about covering your basic needs. And you’re seeing the returns on your savings and investments, maybe even enough to cover your basic living expenses.

5. Independence

You’re earning passive income from investments, and if it’s going really well those returns are enough to pay for your current lifestyle and standard of living… for the rest of your life.

This varies from person to person. For some, RM 24,000 annually is considered financial independence, for others, it may take significantly more. Decide on which amount is best for YOU and get to work!

6. Freedom

You’re killin’ it! More than just the basics, you can also afford all the cool things in life you’ve always wanted – going on holidays, trying out new experiences, spending time on a hobby you’ve been wanting to try out.


7. Abundance

More than enough. For anything. In fact, you have so much money that you can’t possibly spend it all in your lifetime. At this stage, you’ll be looking to give more – maybe giving some to family and friends (we buddies too, right? 🤪), and donating to charity. The more you give = the more you get.


Like all things in personal finance, your journey to financial freedom is PERSONAL. What you consider being financially ‘free’ might be different from our definition here, and that’s okay. This is a guide, not a step-by-step manual 😉. You do you, boo. 

Which stage are you currently at, and how soon can you move up a stage? Comment and let us know!