How To Become Financially Independent – Part 6
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Our series about how to become financially independent has defined ways of thinking that hold you back from achieving the financial independence you deserve. By exploring our standards and perceptions, we can understand what holds us back from financial freedom so we can make the necessary changes in our lives to improve our financial situations.
Another way to reach for financial independence is to cut your costs rather than beef up your income. When we figure out our bills versus our expenses and realize we are coming up short, often we rush to earn more money rather than stopping for a moment to figure out where we can cut back. In fact, if you examine your budget carefully, you will find plenty of places to cut back rather than earn more money. After all, if you have to work a second job to afford those stops at Starbucks, wouldn’t it be more cost-effective to take coffee from home.
By cutting back on everyday expenses, you can get a more realistic picture of what you need to earn to meet your daily needs. Eliminating unnecessary expenditures may even relieve you of the idea of needing a second job. Financial freedom can simply mean redefining your wants and needs to you can fit them into your current budget.
Our next entry will discuss additional ways to learn how to become financially independent so you can live the life you really want.
Tags:Debt Management, Financial Freedom, Financial Independence Passive IncomeHow To Become Financially Independent – Part 5
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.
Tags:Debt Management, Financial Freedom Financial IndependenceHow To Become Financially Independent – Part 3
In our most recent entry about how to become financially independent, we discussed the importance of lifestyle decisions and how they impact over overall financial picture. Today we will consider some basic standards for living and decision-making that can give you greater financial freedom over time.
Our lifestyles seem to be constantly driven by surface elements such as prestige or brand names. Advertising and the actions of people around us can influence to make very expensive decisions that wind up costing us our financial freedom in the long run. Just because the media or your friends or neighbors are buying into a pricey trend doesn’t mean you have too. Before you feed into media frenzy and popular hype, take time to really consider what you are buying. Do you really want the item or do you feel pressured to have it because everyone else does?
You design your own lifestyle and it should not be defined by the whims of others. Money needs to be spent in the areas that will be best for you. Before you make a purchase, you should ask yourself if your expenses are reflecting your true values or are they influenced by something else? What do you think you should have and what do you really want? Is advertising compelling your decision? Only make purchases that fit into your lifestyle and that you can afford. Going into debt to keep up with the latest trends can be an expensive error that builds up debt and costs you financial independence.
Tomorrow we will discuss setting standards so you can really learn how to become financially independent and stay on the right track to get there.
Tags:Debt Management, Financial Freedom Financial Independence
How To Become Financially Independent – Part 2
Our new series discussing how to become financially independent by changing your current perception of financial freedom. If you feel financial independence is all about a mansion, posh vacations and fancy vehicles, you’re going down the wrong path to get there.
Thinking big can jeopardize your very potential and desire to reach financial independence in a realistic way. In other words, looking at a goal that is unattainable in your current circumstances get frustrating and unrewarding. As a result, you decide to remain in debt, continue to struggle and not even try to reach your goal of becoming financially free.
Money problems are not necessarily solved by getting more money. There are other ways to solve your cash flow problems by changing your perception of finances. Having financial integrity will give you power within your current circumstances. Knowing how much money you have to live on and finding a way to live within those means is empowering. Instead of comparing what you have to what others have, you can find satisfaction within your means – it’s an excellent first step.
You can also make different lifestyle choices such as saving money on buying brand names for prestige or identity. Are you being driven by advertising or keeping up with the infamous Joneses rather than having your expenses reflect your needs.
Tomorrow we will discuss the basic standards you should have to become financially independent without being wealthy.
Tags:Debt Management, Financial Freedom Financial IndependenceGetting Financial Independent of Parents and Husband After Divorce
Getting financially independent of parents and your husband after a divorce can be difficult. However, as an adult who may have children of your own, you realize the importance of money knowledge – financial independence can take you where you want to be.
In the first 10 years of marriage, 1 in 3 marriages will result in divorce. Many people face the same challenges as you and there are ways to get started on the road to financial freedom:
-find affordable housing and purchase a condo, home or small dwelling of your own so you have personal freedom and built equity for your monthly payments resulting in greater financial freedom in your future – remember to get rental insurance if you rent to protect the assets you have already;
-get new bank account established in just your name and build a small nest egg for a rainy day in separate savings account;
-make a budget on paper so you can see your income versus your expenses to make any necessary adjustments;
-figure out how to get out of debt as quickly as possible and then stay out of debt to keep your credit rating good; and
-get life insurance for your children and make a will.
By taking care of these essential elements, you can remain financially independent of parents and husband after your divorce to regain greater control over your own life.
Tags:Debt Management, Financial Freedom Financial IndependenceAchieving Financial Independence Slowly
Achieving financial independence is not a marathon event where the winner takes all. Rather, financial freedom is an individualized goal based on your own unique desires and needs that involves learning how to get out of debt to live the life you really want without working constantly to get there.
Financial independence is a goal that takes time to achieve. Your first step is to figure out your monthly budget based on necessary expenses versus your income. You need to earn enough money to cover your basic needs or you are living beyond your means on credit, putting yourself in a precarious position financially. Once you know your expenditures, you need to find ways to earn enough to pay for them or to lower your monthly expenses so your money means more.
Financial freedom can be earning more money or spending less money, depending on how you approach it. Either way, you need to avoid debt and always earn enough to meet your monthly necessities. When you earn additional money, you can use it to establish sources of passive income to make your cash yield an income for you. For example, you can earn interest on a savings account, CD or make dividends by investing wisely in stocks and bonds. Other ways to earn passive income include creative endeavors that earn royalties and affiliate marketing. You can earn passive income while you work your day job to boost your earning power. If your business efforts soar, you may even be able to leave your day job behind for greater personal and financial freedom.
While achieving financial freedom may take a few months or years, the result is a more comfortable, secure lifestyle for the rest of your life.
Tags:Debt Management, Financial Freedom, Financial Independence Passive Income
The Reality of Achieving Financial Independence
The reality of achieving financial independence is that you have to keep sight of your goals. We hurry to pay off bills and scurry to save for retirement, focusing on frugality and completing forgetting why we are rushing around at all. This is losing sight of the real goal that everyone wants – financial independence.
Personal independence to choose your employment rather than be dictated to by it. Freedom to spend money without worrying. Knowledge that your bills will be paid and you have a steady income to take care of your regular expenses. Comfort knowing that your debts are paid and that you don’t carry any loans or high interest credit cards. All of these freedoms equal financial independence and without visualizing your success, it will be impossible to achieve your dream.
The bottom line is basic mathematics. You need to figure out a basic budget of what you spend monthly for your living expenses versus what you earn. If you earn more than your monthly expenditures, you need to figure out where the rest of your money is going. If you earn less than your monthly expenditures, you are probably in debt and on the road to trouble. Either way, having handle on your money lets you know where it’s going so you can get greater control over your spending and saving habits. Knowledge of the bottom line is also a motivating factor to encourage you to earn more to gain the financial freedom you want.
Achieving financial independence starts with managing your budget and having a serious goal in mind.
Tags:Debt Management, Financial Freedom Financial Independence
Financial Independence Debt Solutions – Part 5
We have discussed financial independence and practical debt solutions to eliminate high interest bills and improve your credit for better financial standing. By getting rid of debt and developing a positive perspective about money, you can create a realistic budget and finally reach financial freedom.
The last part of our series will discuss the debate of which credit cards to pay off first. While many financial experts recommend that you pay off the cards with the highest interest rates because it is the most expensive debt you are carrying, other financial experts feel you should pay off credit cards with balances closest to the credit limits first. The reason for this is because 30 percent of your credit score is determined by how much credit you are using. The lower your balances are in relation to the credit limits on your accounts, the higher your credit score will be. You should always try to use just 50 percent of your available credit to remain in good standing and boost your credit score.
Once you pay down your balances to 50 percent of your credit limit, you can then pay off the high interest credit cards first. By tackling your credit card debt in this manner, you will pay down your bills and improve your credit score at the same time.
By applying the practical debt solutions presented in our mini series about financial independence, you can become debt free and enjoy greater financial freedom in the future.
Tags:Debt Management, Financial Freedom Financial Independence
Financial Independence Debt Solutions – Part 4
Today in our series about financial independence debt solutions, we will discuss more practical ways to improve your finances to achieve greater financial freedom in the future.
If you are in a situation where your credit cards and accounts are already delinquent and you are constantly being hit with late fees and over-the-limit charges, there is a way to minimize you debt and improve your credit at the same time. Call each of your creditors and discuss the possibility of re-aging your accounts. When you re-age your accounts, the creditor will wipe out all the late payments from your credit history without wiping out your total debt. While the re-aging process will also wipe out all of your credit history on t he account, you will get rid of the poor reports regarding late payments and delinquency. Of course, the length of your credit history affects your score so either way you will experience a compromised credit score. However, if you have a spotted record filled with late payments then re-aging your accounts can improve your overall credit rating.
To qualify for re-aging, the account must be at least nine months old, you need to have made a minimum of three minimum payments on time and you need to prove you are willing and able to repay your debt (such as by offering evidence of a regular income). If creditors are unsure what you want, refer them to the specifics of re-aging set by the Federal Financial Institutions Examination Council and outlined in the Uniform Retail Credit Classification and Management Policy. Remember to be agreeable when you ask for re-aging because this is done at the discretion of the lender.
Tomorrow is the final part of our common sense series offering financial independence debt solutions you can use today for improved finances tomorrow.
Tags:Debt Management, Financial Freedom Financial Independence
Financial Independence Debt Solutions – Part 3
Our financial independence series presents practical debt solutions and little-known information about your credit that can help you reach your economic goals. Instead of spending your life paying interest, pay off your debts so you can finally make your money work for you instead of working so hard for your money.
If you are looking to lower your ratio of debt versus your available credit limits to boost your credit score, there is something you should be aware of. Certain credit card companies do not report total available credit limits to the credit bureaus that ultimately determine your credit rating because legally speaking, they really do not have to. Reporting your debt ratio to the credit bureaus is voluntary and your creditors can decide which information they want to report and which they will withhold.
With this in mind, your credit score may be negatively impacted when creditors do not report your total credit limit. What usually occurs is the credit bureau lists your credit limit as the highest balance ever carried on the card, which can make your card look maxed out if you carry approximately the same balance each month. The only way to know is to order a free copy of your credit report and to check. You may prefer to deal with creditors who report debt ratio or discuss the situation with your current creditors to improve your overall credit rating.
Tomorrow we will discuss other ways to improve your credit and get more cash for the financial independence you desire.
Tags:Debt Management, Financial Freedom Financial Independence