Why don’t you declare your financial freedom this Independence Day?
What is the significance of Independence Day in your life?
What does it actually mean to you and how will you describe it in a single sentence?
To me, Independence Day is the day of inspiration. And the reason behind saying so is the fact regarding my blog. Even, today also I remembered the date 4th July, 2012 when for the very first time I decided to launch a personal blog of mine and as a result, on that very special day my cutie pie blog “DebtFarewell“ took it’s very first step on web. Since then I have crossed many milestones, in fact, this is not only blogging, rather it’s a place where I express myself independently. Till date, I have written ample of financial posts, especially those things that I have experienced in my life.
As a single mom, I have been seeing financial ups and downs throughout and I kept sharing my experiences with my readers through my blog.
Anyways, Independence Day is on the cards and hence, this is the perfect time to share my thoughts about financial independence with my readers.
First let me tell you the definition of financial freedom, tell me what if you’re told that you can’t do anything with your free will and you have to ask someone before you spend even a single penny. Well, you probably would be furious and say, “Who the hell you are to curb my freedom?” yes…this is called financial freedom – the freedom of spending my hard-earned dollars in my own discretion. Money is one of the most important things of my life and so managing your personal finance properly is as important as maintaining your health and fitness. Managing your money is like keeping a decanter with water and controlling its flow by a tap. The container won’t get bigger, but you must keep refilling it so that you don’t have to face any problem even at the time of insufficient supply of water. Similarly, you have to save money for the rainy day to achieve financial freedom and so that you don’t have to worry about depending on somebody especially after retirement. Independence Day is round the corner and you pledge to be financially free. Start your journey from this July 4 and see the difference.
Now, let us come to the next point. If you’ve already planned your strategy towards financial freedom, nothing can be better than it. However, if not, let me tell you five good tips that would help you achieving financial independence effectively.
Having basic knowledge
First of all, you have to know the basics of finance. It doesn’t mean that you have to be a financial expert or a banker. Getting access to any information on stocks, bonds, mutual funds or insurance policies can be done through Internet. Make use of it and empower yourself as I do. You can also try to attend investor education conferences and seminars. Having fundamental knowledge of myriad financial products would help you have a better grasp on your finance.
Creating a plan
At different phases of your life you will require money to do different things. So it is very likely that your financial goals will change accordingly as you grow older and priorities of your life changes. Thus you must create a plan before making major expenses and chalk out a proper plan to meet your goals. Keep a track of different financial products like stocks, bonds or mutual funds, provided yo’ve invested in any of them. Keep proper track of your portfolio as well. These days, you will find a number of sources to inform you about different kinds of pecuniary products. Use your knowledge and check your requirements and see which products would serve you the best.
Having an emergency fund
Being a financially wise individual, you must maintain a contingency fund. You should always hope for the best and prepare for the worst as we all know that life is unpredictable and calamity can strike at any point of time. It can be a medical emergency or a job loss. So you must build up a rainy day fund to accommodate your family for at least 4 to 6 months without income.
Exploring way for an additional income
Do you have any special expertise or a hobby that you have been nurturing since years? Well, if so then see whether or not you can use your skill to earn some extra bucks every month apart from your regular income. In other words, you need to earn more than what you spend. Milk your talent to have an additional income. Besides earning, it would give you great sense or achievement as well as creative fulfillment. Investment with the supplement dollars can also be a good option that I often do by blogging. This extra money can be used for repaying debts or even for entertainment sometimes.
Avoid borrowing and even if you need to do it for buying a home or car or for your child’s education, try to borrow as little as you can. Also, you should discharge any such obligation as soon as possible. I owed too much as student loan and credit card debts in college. And repaying them was a big challenge for me and that I have done through the hardest way. I saw toughest financial time of my life during my college days. Life taught me a hard-hitting lesson indeed. Now, though I have home mortgage payment which is less than 1/5th of my income and a moderate car loan. If you can avoid owing debt, you can put more money to work for you by earning interest instead of paying it.
Independence of the nation was something which was not achieved overnight. Hundreds of thousands of men and women sacrificed their lives, family and everything to pursue a life of happiness for every American. Franklin, Washington, Adams, Jefferson and many more Founding Fathers started the nation with a dream that all Americans lead a life free from monarchies, dictatorship and constraint of oppressive government. However, with every passing day, the politicians elected by us, government programs that the Congress comes up with and every dollar spent that actually we don’t own, we are losing our freedom that we have got and of course started taking for granted over past two centuries or even more. From financial perspective, all I can say, we have to earn the freedom and save as much as we can whether by doing a business or a job. You just need to pay due taxes back to the government and that’s it. Nobody is stopping you from making money and spending in your own judicial way and this is what we consider as financial freedom as I have already discussed. .
Independence Day is in the offing. This is the perfect time to consider our individual freedom along with the freedom of the nation. We should also consider what we can do to keep the nation aloft. Not only political freedom, I will definitely encourage you to take a couple of minutes and consider your financial independence at this time.
Finally, I am ending the article by including few summarized points related to the meaning of financial independence from the article: http://www.stretcher.com/
- Being comfortable with the things you have.
- Pay your utility bills on time.
- Not carrying a credit card balance.
- Not being afraid of bill collectors.
- Have six months of expenses in savings.
- Being able to be unemployed for a short period without triggering a financial crisis.
- Being able to buy a car without an auto loan.
- Not having any personal or debt consolidation loans.
- Not having any unpaid student loans.
- Not having any 401k loans.
- Freedom from financial fears.
- Own my home without a mortgage.
- Ability to give to needy friends/family or charitable organizations.
- Income dependent on interest from savings, not from working.
- Having sufficient retirement savings.
Over to you
How would you like to celebrate this independence day and what are your aims that you would like to set on this day? Is there anything special that you think I have missed out while writing this article and you are very much interested in covering that point? If yes, then please feel free to shoot me a mail at debtfarewell @ gmail . com and even don’t forget to leave your valuable insights on my FB, Twitter, G+ or any other social media profile page. I would love to know your thoughts.