Financial Independence Through The Years – Part 3

June 27th, 2008 | Stacey | Debt Management, Financial Freedom, Financial Independence

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Our latest blog series discussed financial independence and the typical stages people go through on their journey to financial freedom. From moving out to avoiding credit, we’ve discussed ways to reach for financial independence.

Today we will discuss the use of credit. Our last entry mentioned how important is it to stay out of debt. However, most people wind up taking on debt after they live on their own for awhile. Paying rent for an extended period of time inspires many people to purchase their home. Without hundreds of thousands of dollars in cash, a mortgage becomes a loan people take on to own a home.

If you do pay for a house with a mortgage, put as much money down as possible. Double up payments to pay off the mortgage more quickly. Avoid taking out other credit. When you are on your own and then assume dependents such as a spouse or children, credit becomes a way to get the money you need when you need it. After all, you are a parent yourself and you have been free of your own parents for years. Often it is better to swallow your pride and borrow from family rather than paying off high interest credit cards for years.

Finally, purchase used vehicles with cash rather than taking out a car loan. This is another payment that will rob you of financial freedom by charging interest. If you do have overextended credit, start paying down your balances. A credit counselor or accountant can assist you with getting started.

Tomorrow we will talk about financial independence and setting adult goals.