Will This 4th of July Be Your Financial Independence Day?

4th of julyNow that the 4th of July is upon us, it may be time to think about our own financial independence!

There will be no fireworks and no picnics, just some hard work to reach your own financial independence. I promise it will be worth it.

The secrets to achieving financial independence are pretty straight forward.

It will require diligence (one of my favorite words!) and sacrifice. So many people that never achieve significant wealth just don’t make sacrifices. They never master deferred gratification and the importance of saving money over time.

So here’s my Financial Independence tips:

First, you’ll need to spend a lot less than you earn. I’ve mentioned living within your means in many of my other articles. That means you need to have some sort of working budget. Perhaps, as a first step, pick just one or two categories to track. If you know you have a problem with dining out or shopping, start with those.

Save at least 10%. Every person I’ve ever met has made a commitment to saving a large percentage of their income. If you can save 15-20% then by all means do it. If you are at a point where you are saving nothing, then save 1-2%. Just start somewhere. Don’t get impatient with your progress. Every millionaire had to start by saving the first dollar.

Keep your hands off the money. Save money before it ever comes into your hands. You can do this by setting up deferrals in your retirement plan at work. You can also set up automatic transfers to your savings account or IRA once its deposited into your checking account. Save it before you spend it.

Watch your debt. Just because a credit card company gives you a gigantic credit limit does not mean you have to spend to that limit. If you know you have a problem with this, then request a smaller credit limit. (Yes, you can do this) With each purchase ask yourself, do I really need this right now. You might just not spend as much. Do yourself another favor, start a debt repayment plan now. No one I’ve ever met that is financially independent, owes a ton of moolah to creditors.

Have a plan. I talk about this all the time. You plan your vacation and trips to the grocery store. Why not have a plan for your financial independence? Develop a formal plan for achieving your goal. When to achieve it, what you want, and how much it will cost.

I love the 4th of July almost as much as Thanksgiving. It’s another unique American holiday that focuses on important values. Mark this 4th of July as the date that you started on your journey to financial independence.

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