How To Become Financially Independent – Part 5

February 11th, 2008 | Stacey | Debt Management, Financial Freedom, Financial Independence

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In our series about how to become financially independent, we are defining standards and perspectives that help you to build your life around financial freedom rather than driving yourself into debt and despair. Prosperity is about perspective as much as it is about money management.

Today we will discuss the importance of really knowing the condition of your current finances. Often we think it’s better “not to know” the exact tally of our debts and expenses. Are we afraid the mere knowledge will make our bills go up? Rather, it’s the contrary that makes our bills increase – not knowing the extent of our debt and allowing ourselves to get into deeper debt as a result. Define your idea of financial freedom and then know how far away you are from achieving it by honestly checking out your current situation. Total your debts, figure out your necessary monthly expenses and tally all sources of income to see where you stand. Knowledge is power so it is never better “not to know” the true numbers that pertain to your personal finances.

The first step after you get the bottom line is to get rid of money mongers. What are money mongers? They suck up your cash and you have little to show for them. Figure out 10 ways to save money and stick to them. From brown bagging lunch to buying only one lottery ticket to eating pasta two nights a week, there are hundreds of little ways to save money and all you need are 10 to get started.

Tomorrow we will consider other ways to tackle our financial picture and how to become financial independent in the process.