Your Declaration of Financial Independence
Posted in: Money Management
Are you ready to declare financial independence? Now more than ever, it’s time to loosen the bonds of debt and experience the freedom that comes with a financially sound lifestyle. Here are 10 tips to help you get started:
- Pay your credit card balances in full every month, and use them sparingly.
- Boost your emergency savings fund to cover three-to-six months of living expenses.
- Create a budget and track expenses. If you haven’t already done so, now’s the time to get a real sense of your incoming and outgoing funds.
- Review your bank account and credit card statements monthly You might be surprised by what you find – monthly subscriptions for services you forgot to cancel or an overpayment at the restaurant you visited last week, for example.
- Pay into your retirement fund once your credit card balances are zeroed out and your emergency fund is in place.
- Set money aside for big purchases. Throughout the year, save a little each month to cover summer vacations, Christmas gifts and other major expenses that can thwart your saving goals.
- Teach your kids money management skills to help them prepare for the high-stakes “real world.” The earlier the better!
- Invest in good insurance. Take care to purchase quality health, auto, life and home/rental insurance, and shop around for the best prices. Insurance is one area where you can’t afford to skimp.
- Adjust your tax withholding if you consistently receive a refund – unless you like giving the government an interest-free loan. If you usually owe money on April 15, increase your withholding to ensure you break even when you file your taxes.
- Pay down your mortgage. . If you’re already debt-free and investing in your retirement, consider plugging away at your mortgage. Even one extra payment each year can trim considerable time off your loan payments.