Financial Independence Through The Years – Part 2

June 25th, 2008 | Stacey | Debt Management, Financial Freedom, Financial Independence

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Our discussion of financial independence through the years deals with the various phases people traditionally experience as they reach toward financial freedom. These steps may take some people only a few years while others may struggle for a lifetime. Understanding the road ahead helps you make better decisions to reach financial independence more quickly.

The last entry discussed the first step toward financial independence occurs when you complete your basic educational goals and live successfully on your own for a few months without assistance. Once you know you can survive on your own, you feel a sense of accomplishment and a greater ability to attain financial independence.

When you are free of debt, you have total financial independence. While many people reach toward building credit, is this really the wisest step to take? When you have debt, you are harnessed to that debt. If you paid off educational loans, you know that debt takes up a portion of your income. When you have no student loans, no mortgage, no credit cards and no vehicle payments, you are free. Your basic expenses include housing, taxes, food and insurance. The rest of your money is yours to spend as you wish. You can save for that awesome house or car so you don’t pay interest!

Tomorrow we will discuss dealing with credit, working for pay and moving on to a better place so you can have financial independence in the near future rather than as a distant goal.