3 Ways Our Definitions of Financial Freedom Have Changed

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Haven’t you heard? Millennials are killing industries left and right. We do it via our willful abandonment of brand loyalty and our near-constant need to have everything – from breakfast to remote work options – all on-demand.

I hesitate to say, however, we’ve killed the definition of financial freedom. Rather, I find millennials are reshaping traditional notions of financial independence into ideas that are not only more flexible but also more in line with the internet-driven culture everyone inhabits.

A Dramatic Shift in Financial Milestones

Millennials are taking down traditional financial milestones one by one. These changes are borne of shifting expectations and also by inheriting drastically different financial circumstances than our parents and grandparents. Specifically, I’m talking about student loan debt; the average student loan burden for a millennial is 1300% higher than what it was for Baby Boomers at the same age. Yikes.

The path to financial freedom used to include working one job for a few decades; enough years to collect a sizeable pension, pay off your mortgage, and retire at 65 to a life of golf, gardening, and travel. Now, one of the biggest financial milestones is paying off your student loans. Below are a handful of other ways financial milestones have changed in the last twenty years.

  • Can’t afford a home? Live in a tiny one. Or just rent instead.
  • Instead of a pension (or even a corporate job with competitive retirement benefits), many millennials thrive in the flexibility in the gig economy or find self-employment more lucrative than a 9-5 job with historically stagnant wage growth. Recent MetLife research finds that 23% of corporate employees intend to start a gig job in the next year, with 1 in 5 of those gig workers eventually leaving full-time employment to pursue their “side hustle.”
  • Instead of a house with kids, many are foregoing children, or delaying them, in order to focus on getting to a better place financially. Research cited in the New York Times states 31% of young adults are delaying (or forgoing) childbirth because they can’t afford childcare, 24% delay because they can’t afford a home, and 13% delay because they have too many student loans.

Credit Card Debt is No Longer the “Necessary Evil”

The definition of financial freedom has always included some component of debt payoff. After all, you can’t be financially free if you still owe money, right? But in the wake of the recession and rising student loan debt, the definition of financial freedom may mean avoiding credit card debt entirely.

Sure, you can argue that student loans prevent younger generations from accessing new forms of debt, but research bears out that many avoid credit cards simply because they’re savvy enough not to finance a lifestyle they can’t afford. Of millennials with credit card debt, two-thirds report feeling “really stressed” about it, which is a much higher level of concern than both Gen X and Baby Boomer debtors.

“Retiring Early” Isn’t Really About Retirement

Late last year, money guru Suze Orman invoked the ire of the internet by saying on a popular podcast that retiring early really isn’t possible without $5 million in the bank. Later on, in an article she wrote for Money.com, she issued a retraction:

Retire Early for FIRE followers is not about stopping work completely. It is about stopping work that you don’t like, or just do for the money, and finding work that you actually enjoy, and that fulfills you.”

I’m highlighting her words here because they are the essence of what work and retirement really mean in the 21st century. The New York Post reports 33% of the American workforce will be self-employed in the coming years. And if millennials have to work later and longer in order to accrue real wealth (like having enough saved for retirement), wouldn’t it make sense to create your own job stability and flexibility? Yes, I think so.

Orman and FIRE (financial independence retire early) movement followers can quibble over the amount needed to retire early; the new definition of being financially free includes immunity from three main things: debt, a job you hate, and other’s expectations.


How has the concept of “financial freedom” changed for you over the years? Tell us in the comments and on social with #RealMoneyTalk!