16 Steps to Speed Up Your Financial Independence Day
16 Steps to Speed Up Your Financial Independence Day
Avoid financial fireworks
As we head into the Fourth of July weekend, we think a lot about freedom. Money -- and understanding your finances -- is a special kind of freedom. If you get your financial situation under control you can control your life and not be beholden to other people. That's an extraordinary freedom that anyone can attain if they follow these steps.
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1. Know your finances
You can't achieve financial freedom if you don't understand how much money is coming in and how much is going out. Start your road to your financial independence day by creating a budget. List all your income and all your expenses and figure out if you have a surplus or a deficit each month.
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2. Make immediate decisions
If you have a deficit, you must immediately correct that. That means cutting expenditures or finding a way to make more money. On the other hand, if you have more money coming in than going out, you should figure out the best ways to deploy that money to put it to work for you.
ALSO READ: This Budget Calculator Can Help Keep Your Expenses in Check
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3. Pay off high-interest debt
As you triage your finances, the most important move you can make is getting rid of high-interest debt. Generally that means credit card balances and personal loans. Paying those off can help you free up cash to use in other areas.
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4. Know your destination
You can't get to a destination if you haven't picked one. Decide what your goals are in the short- and long-term. These may be moving targets and you should revisit them often.
5 Winning Stocks Under $49 We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.
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5. Build an emergency fund
Once you have a budget and get your debt under control, it's important to build an emergency fund. Ideally, you will work toward having six months in reserve in case of job loss or unexpected expenses.
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6. Decide what's important
Housing is generally our biggest expense. When you decide where to live, figure out what's most important to you. Is it location? Maybe space matters more. Or perhaps you really want a pool. Be realistic, but make the tough choices so you put your money into what matters most to you.
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7. Keep your car
After our homes, our cars are generally one of our largest expenses. You can cut this expense by doing two things:
- Never buy a new car: A one-year-old car saves you huge money and it will be just as reliable.
- Keep your car after you have paid it off.
These two simple moves can put more cash in your pocket and neither is a major sacrifice. Think of your car as transportation not fashion or an accessory.
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8. Make little cuts
If you treasure your morning latte and it makes you happy then by all means, keep buying it. On the other hand, if you're buying it (or anything else) out of habit, not because it brings you joy, make a conscious effort to cut that expense.
ALSO READ: Good News: You Can Have Your Daily Latte and Still Retire in Style
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9. Become deal savvy
When possible, never pay full price. Make finding the best deal possible a normal part of your shopping experience. Figure out which gas stations generally have the lowest prices and learn how to use deal websites. Make an effort to know when items go on sale and be willing to wait to make a purchase until you can get a better deal.
5 Winning Stocks Under $49 We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.
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10. Take the easy steps
If your employer offers a 401(k), make sure you take advantage. That's especially important if your company offers a match. Make sure you contribute enough to get the full match as that's literally free money.
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11. Invest and hold
In the long run, the stock market has historically gone up. Buying and holding stocks (or index funds) can help you achieve financial freedom. The important thing is to be a long-term investor and not a trader seeking short-term gains.
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12. Get a second opinion
When you buy big-ticket items, make sure you always get at least a second price to compare. There's really no excuse for not doing that given that you can check prices on nearly every item from the convenience of your cell phone.
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13. Wait 24 hours
Before you make any unplanned purchase, wait 24 hours. If you still think you need the item after waiting a full day, then you probably actually need it. Impulse buys can ruin your budget and sometimes just taking a step back can stop us from making mistakes.
ALSO READ: Americans Make 156 Impulse Purchases Each Year. Here's How to Break the Cycle
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14. Treat yourself
Achieving your financial goals may mean making some sacrifices. It's important, however, to make sure that while you may pass on certain big-ticket indulgences that you still treat yourself in affordable ways. That can mean different things for different people, but make sure that you find little ways to reward yourself.
5 Winning Stocks Under $49 We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.
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15. Stay on top of things
Are you paying for subscriptions you don't need? Do you have other recurring expenses you have simply forgotten about?
Sit down a few times a year and look at where your money is going. If you're paying for things you're not using, cut those expenses.
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16. Make more money
Money solves a lot of problems. If you make more of it you can achieve your goals and reach financial freedom faster. That could mean taking on a side hustle or it could mean working to develop your career so you can get a raise or a higher-paying job.
ALSO READ: 2 Investing Tricks to Double Your Money
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