Financial Independence and Debt Management
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Financial independence seems even further away when you carry significant debt. Almost seven million Americans have short term debts that exceed 20 percent of their annual income. Debt management programs consolidate debts into one payment to help people pay off these ongoing debts for greater financial freedom.A debt management program can lower your payments significantly and help you pay off debt within three to five years. As you pay off debt, you rebuild your credit rating and get rid of all those harassing letters and phone calls to collect the debt.
A credit counselor works with you to reduce your monthly payments by reviewing your current financial situation and contacting your creditors. The result is reducing interesting charges, fees and monthly payments so you can start to get rid of debt. You make one monthly payment to the debt management company who disburses the funds to all your creditors to pay them off. Your creditors will still send you statements showing your debt getting paid down.
Often people save anywhere from 20 to 50 percent on their outstanding debts by talking to a credit counselor. As a result, debt is paid off more quickly while your credit rating improves. The first step toward true financial independence is to get rid of those nagging short term debts.
Tags:Debt Management, Financial Freedom Financial IndependenceFinancial Independence and Your Children – Part 6
Teaching our children about financial independence is essential. We often encourage our children to do what they are told and get a job, which are noble pursuits. However, if we do not teach them the skills to become financially independent they will wind up living from paycheck to paycheck like the majority of people.
To break the cycle of living from paycheck to paycheck, we need to educate our children about handling money. Our last entry discussed taking the fear out of the stock market for our children by letting them create their own dummy portfolios. This invaluable experience will put them ahead of the game.
Our suggestion today gets more bold. Once your children have successfully tracked the market for a few months and built viable dummy portfolios, let them invest on their own. Of course you wouldn’t let them make a major investment, but give them the opportunity to really put their skills in action. Give them a few shares of stock so they can watch their progress. This makes the process real for your children, rather than just playing in the Internet. Their gains and losses are actual so they can really get a feel for how the stock market and business work.
In our final entry about financial independence and your children, we will discuss additional ways to invest in stocks and bonds to create a more secure future for your children. After all, children will be the future of tomorrow and we want them to have a greater understanding of financial concepts than the people who came before them.
Tags:Financial Freedom Financial Independence
Financial Independence and Your Children – Part 5
Our newest series addresses the issue of teaching your children about financial independence. Is it enough to ensure they value their education and get a job? Today, this is not adequate preparation for the future. If you want your children to succeed and have control over their financial situation, you need to teach them about financial independence at an early age.
When we tell our children to work for someone else, we are telling them to put their destiny in another person’s hands. While working for an employer teaches essential skills and gives your children work experience, their ultimate goal should be self-sufficiency. Whether your children establish independent income from investments or their own business, you need to teach them to take control of their own destiny and finances.
We’ve discussed teaching your children how to save and make wise decisions about spending. Another way to empower your children at an early age is to show them how the stock markets work. There are so many ways to teach your children about business markets. Show them the business section of your daily newspaper and explain how stocks rise and fall. Let your children create dummy portfolios at online websites so they can check real-time prices online and see how their imaginary investments would work out. Take the fear out of the stock market so your children feel confident to approach it as adults.
Our next entry will discuss more ways to teach your children about financial independence for a more secure future.
Tags:Financial Freedom Financial IndependenceFinancial Independence and Your Children – Part 4
Financial independence seems so difficult to attain when you reach adulthood. One of the reasons may be the philosophies you are taught about money as a child. Often we are encouraged to get a job and be secure but we really don’t know the first thing about attaining financial independence.
Teaching our children about financial independence is one of the greatest gifts we can give them. It’s like the old saying you can give a man bread or teach him how to make it. We want to teach our children how to take care of their money and themselves for greater freedom in their future.
Our series discusses ways to teach your children how to approach finances with confidence and a sense of savvy rather than being submissive and taking second best. Another way to teach your child about the importance of money and how it is spent is to make them part of your major purchasing decisions.
Whether you are shopping for new appliances or a new car, you can discuss the procedures for making major purchases with your children. Let them help you go comparison shopping, do research and look for coupons and discounts. Encourage them to read magazine and online forums to find out the most information. Show your children how you negotiate with salespeople to get a better deal.
When you hold out for the best deal, you’re not only helping yourself but teaching your children. Your kids learn from what they see. After watching you negotiate a good deal, your children will never pay ticket price when they make major purchases. Help your children learn a valuable lesson about financial independence by making them part of a making purchasing decision in your household. Our next entry will discuss even more ways to help your kids learn about financial freedom.
Tags:Financial Freedom Financial IndependenceFinancial Independence and Your Children – Part 3
Attaining financial independence is a skill we often forget to teach our children yet it is a necessary skill for survival. We can never get ahead financially if we continue to limit our potential by handling our resources poorly. Teaching children at a young age how to budget and earn money for financial freedom gives them the skills to succeed in life.
Our series discusses simple ways to teach your children about financial independence so they can someday be financially secure. We’ve talked about giving your child an allowance then having them save and budget for items they want. This gives your child a goal and the feeling of satisfaction they can achieve that goal.
Now that you have your children handling their own allowance and saving for major purchases, it is time to teach them about saving for a rainy day. Open a special children’s savings accounts so there are no fees for having a small balance or making minimal transactions. Have your child save money for their savings account every week and then deposit it once a month. Give your child access to their savings account statement when it comes in so they can track their progress and see how much interest they earn.
If your child wants to take money out of savings, create a chart to show them the progress of their money if they leave it in savings. Discourage taking money out of the savings account, explaining this cash is for their future needs such as college and a car. Encourage your child to save the remainder of their weekly money for the disposable items they want. This will also teach your children discipline with regard to how they spend their money.
Tomorrow we will discuss additional ways to teach your child about financial independence for a freer future.
Tags:Financial Freedom Financial IndependenceFinancial Independence and Your Children – Part 2
Teaching your children financial independence today will give them the skills they need for success tomorrow. Often we are raised to learn about a variety of other important issues but financial matters are frequently ignored. Our children grow up without fully understanding how to control their personal finances.
Our last entry discussed the importance of giving your children an allowance. It is easy to ask you for money but more difficult to figure out how much of their own money they need to get what they want. The next step to teaching your children financial freedom is to help them create their own budget.
If they have something they want to buy, give them a small notebook to tally their weekly allowance versus the cost of the item they want. When they spend a portion of their allowance on something else, have them enter it in the notebook. Your children will see how spending for a snack will take away from what they are saving for. They will also realize the value of saving when they see their notebook balance start to reach their goal.
This essential lesson will help your children understand how important it is to save for what they need or want. They will also have a feeling of accomplishment when they are finally able to save for what they wanted. A small victory such as this can fuel larger savings victories for your children in the future when they want to save for a car or house.
Tomorrow we will discuss more ways to teach your children valuable lessons about financial independence.
Tags:Financial Freedom Financial IndependenceFinancial Independence and Your Children – Part 1
We all want our children and grandchildren to have financial independence. You don’t want your daughter or son not financially independent and struggling with debt or to survive from paycheck to paycheck. But there is more to financial independence than building your own bank accounts and legacy. You need to make your children and grandchildren independent by teaching them the ways to attain financial freedom.
Our new series offers suggestions for teaching children about financial independence for a more secure, personally fulfilling future. The first way to teach your kids about money is to give them an allowance when they are young. Give them some cash to call their own and let them learn from the experience. While it’s easy to ask mom and dad for money for a toy or whim, it’s more challenging to save for it. Don’t be afraid to let your children develop a personal connection with money to learn from their victories and losses.
As children get older, you can even give them a pre-determined budget for necessary items such as school clothing. By giving your children a realistic idea of what everything costs, from essentials to luxuries, they can be better prepared for the future and how to spend their money wisely.
An allowance is a great way to learn about money. It is better to make mistakes about the wrong color shirt or a toy that doesn’t last than to buy a car or stereo as an adult that isn’t a wise purchase. Your children will learn how to protect their financial independence by getting their own weekly spending money and a bit of freedom.
Tags:Financial Freedom Financial IndependenceAchieving Financial Independence Frees You
Achieving financial independence may seem like a “pie in the sky” goal but what is the alternative? Being enslaved to debt and working for free to pay off your obligations at a much higher rate than they are worth.Every year more than $60 billion in credit card debt is charged off with over $2 trillion in revolving consumer debt being paid off. When you consider the amount of money spent on interest and fees for this debt, it is staggering.
When you are ready to use that credit card, think first. Is the interest charged worth paying it back? Do the fees add up to anything more than unnecessary additional expenses that rob you of extra cash? Do you feel comfortable living beyond your means and using credit to get by? If you answer no to any of these questions, you are already thinking for financial independence. Now you need to take action to free yourself of the debt that drags you down.
Tally your total debts. Figure out your current earnings. If your income is less than your output, it is time to get help from a financial advisor, debt counseling or financial planner who can show you how to make your money work for you. Get a copy of your credit report and figure out how you look on paper. Share all your information with the advisor so you can gain the necessary skills to handle your financial situation and achieve the financial freedom you crave. Every day you remain enslaved to debt, you cannot feel truly free.
Tags:Financial Freedom Financial IndependenceEl Cinco De Mayo and Five Ways To Financial Independence
On el Cinco de Mayo, we are thinking about financial independence and five ways to reach our goals. Though el Cinco de Mayo is about victory in battles that lead to the formal Independence Day in Mexico on September 16, many think of it as a freedom day.
A freedom day involves financial and personal independence, which are closer than you think. Here are five ways to get started:
Know what you owe. Get a handle on your expenses, bills, mortgages, loans, liabilities and everything you owe to everyone so you have a bottom line to work with.
Make a list, check it twice. Find out your assets, make sure you have insurance for them and list them so you know what you would need to replace in an emergency.
Show me the money. Figure out if you have savings anywhere and how much you would be able to put together in cash for a rainy day.
The “b” word we all avoid. Make a budget and stick to it. Include all your expenses including clothing, food and gas as well as savings.
Get passive. For once, getting passive can work for you. Find ways to earn passive income through affiliate marketing, creative endeavors and other business ventures on the side so you can generate extra income.
Financial independence is something we can all celebrate once a plan in put into action.
Tags:Financial Freedom, Financial Independence Passive Income
Is It Ever Possible to Be Financially Free of Parents?
Is it every possible to be financially free of parents? Despite the honest efforts of many people to get debt help and attain financial independence, they still wind up having to ask their parents for help.
This trend is starting to affect people in their 40s and 50s, who are moving back home to live with their aging parents. With rising credit card debts and a slumping economy sweeping the nation, self-sufficient adults are finding themselves without a job and with little or no resources to survive the crisis. As a result, they wind up taking assistance from their elderly parents rather than claiming bankruptcy.
Financial planners are concerned about both ends of this situation. First, the younger generation has to take more aggressive steps to avoid financial peril. Cutting back, saving money along the way and having insurance policies are all ways to avoid financial ruin. Secondly, the older generation is not always equipped to take on the burden of adult children in their 40s and 50s. Often these seniors wind up in financial difficulty themselves when they try to help their family. In fact, Karin Maloney Stifler, a financial planner, states these well-meaning parents, “jeopardize their financial freedom by continuing to subsidize their children.”
Further, a recent AARP survey revealed a quarter of Generation Xers (people between 28 and 39 years old) get financial help from family and friends. The same survey found more than half the people felt they were “financially independent”.
Clearly, the younger generation needs to learn more about the real meaning of financial independence and their parents may need to exercise some tough love to teach them about it so they can finally become financially free of parents.
Tags:Financial Freedom Financial Independence