Financial independence has a nice ring to it, doesn't it? It's what our founders fought for: the freedom to chart our own path to prosperity and achieve the American dream.

American dream? American pipe dream is more like it. With bills to pay, credit card debts to reconcile, shattered portfolios to rebuild, and looming orthodontia expenses to cover, it's easy to declare defeat and let outside forces (banks, brokerages, the Joneses) determine our financial fate.

Financial freedom is just six steps away
In the spirit of the holiday, let's not forget that this country was founded on the idea that we have the power to shape destiny far more than destiny ever shapes us. So what are you waiting for? Light that firecracker and take rightful control of your financial future starting now.

1. Plot your plan of attack.
Financial independence is not a set point or a single goal (although it is often most closely associated with retirement). It means having the freedom -- the financial breathing room -- to pursue your dreams and live at least part of your life exactly the way you want to at every step along the way.

That's why it's important to set short-, mid-, and long-term goals. For some, financial freedom means having enough cash to cover a three-week trip to Europe every summer. A mid-term dream may be paying off the mortgage 10 years early. In the future, the definition of financial independence could be having the means to leave the 9-to-5 life and live off the land (or on the greens) and one's investments.

No matter your definition, there's no way to get there if you don't plot out a plan of attack -- specific goals, dollar requirements, and a time frame by which you want to achieve each one.

Use this step-by-step spending/saving guide to prioritize your dreams and plot the course to make them happen.

2. Shed the shackles of debt.
There are no two ways about it: If you have high-interest-rate credit-card debt, you will never get ahead. Carrying balances on your cards is like robbing your future to pay for the present. In almost every scenario, there is no better use for your first freed-up dollars than paying off the plastic:

  • It is a guaranteed return on your investment (every dollar you pay off saves you from shelling out double-digit interest).
  • Being debt-free puts you in a stronger credit position when you're shopping for a mortgage.
  • Imagine no more anxiety-riddled sleep over those mounting debts and dodged calls from collection agencies.

Buy your independence back from the credit-card companies. Start with this get-out-of-debt guide to learn how to negotiate with your lender and plot your path to being debt-free.

3. Don't allow misfortune derail your dreams.
If you don't already have a stash of savings set aside for emergencies, start amassing one right now. Having a cushion of cash on hand will help you cover life's little (and big) mishaps without having to patch over the problem with a high-interest credit card and cede control of your destiny to your lender. (Here's how to create a cash cushion.)

How big should this essential investment be? Here are some basic guidelines:

  • If you have no dependents relying on your income, then your emergency fund should cover living expenses for three to six months.
  • If you are the sole breadwinner or work in an unstable industry, sock away enough to cover the essentials for six to 12 months.
  • If you're retired and living on a fixed income, you should have enough cash withdrawn from your retirement investments to carry you through five years.

In that same vein, you want to protect that which you hold dearest: kith and kin. In financial terms, that means having the right insurance in place (and at the best price you can find). Here are six types of essential insurance.

Where should you stash your emergency cash? That depends on how you answer these four questions.

4. Treat every dollar as an investment ...
You worked hard to earn it, so treat your money with respect. Every dollar presents a new opportunity to make your money work harder for you (in a retirement account or socked away for a down payment on a home), and not someone else (your lender's year-end bonus).

If you want more leafy greens to invest how you see fit, then you need to keep your expenses under control. Start by concentrating your cost-cutting energies on the big stuff that really pads your bottom line: the 20% of line items on your budget that counts for 80% or more of your spending. That includes things like your mortgage, cars, travel, insurance, and any four-figure line items in your budget. Then work your way down the list if you still need to make cuts.

See "Sweat the Big Stuff and Save $26,000" for an action plan.

5. ... but don't shortchange yourself in the here and now.
Every dollar does indeed represent an investment opportunity. But not every "investment" has a dollars-and-cents return. Financial independence is achieved when you strike the right life-money balance.

At The Motley Fool, we have a more holistic approach to finance. To us, an investment is anything that affects the quality of your life. We firmly believe that saving for tomorrow is not about sacrificing today. Or, in more practical terms: Go ahead and enjoy your daily latte if that's what puts the kick in your step. If you need to, cut back elsewhere -- spending less on something that doesn't bring you as much joy as the java.

Put your money decisions into the larger context of your life using these key findings from those who study the life-money balance.

6. Plant the seeds for future prosperity.
Nothing will earn your independence faster than methodically adding money to your retirement savings.

  • Start by maxing out your company-sponsored retirement plan. If your boss matches your contributions to your retirement plan at work (your 401(k), 403(b), 457, or other employer-sponsored plan), save at least enough to take full advantage of that benefit.
  • The next stop is to fund an IRA (either a Roth or traditional variety). If you're not eligible for the Roth, contribute to the traditional IRA only if contributions are tax-deductible. (If not, stick with your 401(k) (unless it really, really stinks), because you'll get the tax deduction.) Unlike your company-sponsored retirement plan, you're in the driver's seat. You have more freedom to invest in individual stocks, bonds, or mutual funds.

You can earn your financial independence starting with as little as $20. Here's how to invest $20, $100, and $1,000 (and more).