National Financial Freedom Day is observed on July 1 every year and the holiday aims to raise awareness about financial freedom. This ‘freedom’ refers to having enough savings and passive income to be able to afford the kind of life one desires without having to worry about steady employment. Becoming financially free involves paying off outstanding debt or reducing loan costs, building a safety net of savings, and creating passive income sources. This may look slightly different from person to person; some may want to retire early, and others may want to travel freely, but many people across the globe aim to have financial freedom.
History of National Financial Freedom Day
Personal finance is the financial management performed by an individual or family unit. It involves budgeting, saving, and spending money. The first known research in personal finance occurred in 1920, and it was conducted by Hazel Kyrk as part of her dissertation — this piece of literature laid the foundation for consumer economics and family economics. Herbert A. Simon, in 1947, propounded that most people may not be able to accomplish good economic decision-making — something he attributed to limited educational resources and personal inclinations. This assertion and many following research studies found that personal finance education is important to help a decision-making unit make rational financial decisions. After 1990, several universities began offering financial education courses.
The Association for Financial Counseling and Planning Education (A.F.C.P.E.) was established in 1984 at Iowa State University, and the Academy of Financial Services (A.F.S.) was founded in 1985 — these two institutions came to be a very important milestone in the history of personal finance. As the years have progressed, there has been a greater degree of interest in financial literacy, especially among women and the youth. The United States President’s Advisory Council on Financial Capability was set up in 2008 to encourage financial literacy among Americans.
For one to achieve financial freedom, one must organize their current finances and plan ahead. Organizing expenses and debts is very important — it enables you to start saving your money and not depend on a fixed income every month. This can also allow you to live the lifestyle you have always wanted.
National Financial Freedom Day timeline
Kyrk publishes her dissertation on personal finance.
Simon presents the Decision Making Theory.
The A.F.S. is founded.
The United States President's Advisory Council on Financial Capability is founded.
National Financial Freedom Day FAQs
How do you achieve financial freedom on a low income?
You can start by having some specific habits. Start off by setting life goals, making a monthly budget, and creating automatic savings.
How much money do you need to retire?
In short, it depends. You need to calculate how much you plan on spending, including general expenses and other plans you may have. You should also factor in possible societary economic changes.
How much money do you need to be financially free?
A general rule of thumb is to procure at least 25 times your annual expenses in savings.
How to Observe National Financial Freedom Day
Understand what financial freedom means to you
Before you can start planning for financial freedom, you have to understand what that would look like for you. It is a fundamental first step to achieving a solid plan.
Once you figure out your financial goals, gather resources. This will help you keep your goals and plans in place.
A common stepping stone towards financial freedom is investing. Start your journey to financial freedom by researching and investing.
5 Important Facts About Money
The cost of a penny
It costs more than a penny to make a penny.
Dollar bills are made of 75% cotton and 25% linen.
The U.S. Bureau of Engraving and Printing uses about 9 tons of ink daily to print new money.
The $100,000 Gold Certificate bill
The largest note to be printed was the $100,000 certificate that was used in transactions between Federal Reserve Banks.
The Secret Service
The U.S. Secret Service was created to fight counterfeit currency post-American Civil War.
Why National Financial Freedom Day is Important
It’s an excuse to improve your financial literacy
If you struggle with personal finances, National Financial Freedom Day is the perfect opportunity to learn and improve your financial literacy! Take time out of your day to do some reading.
It’s an opportunity to understand yourself better
Understanding financial freedom and what it means to you is important. It’ll help you understand yourself better.
Financial freedom is a great goal
Whatever it may look like for you, financial freedom is a great goal. National Financial Freedom Day just helps people learn more about it.
National Financial Freedom Day dates