Ways to Find Financial Independence
By James Ramone, a guest blogger
Now that Americas birthday has past, it is a great time to reevaluate your money situation and start back on the right path to financial independence.
Luckily, there are a number of ways to achieve financial independence and tons of advice for getting out from under massive amounts of credit card debt and other balances that may have plagued you for years. But the first step should always be the same.
First take a careful and thorough inventory of every aspect of your life and how it affects your finances. You can achieve it by saving all your bills, receipts, financial statements and other records for a few months, and carefully review them. This way you will be able to gain a better idea of how your expenses work out on a monthly basis.
It can be helpful to separate expenses into necessary and unnecessary. Necessary bills would mean things like rent or mortgage payments, grocery bills and utility bills for things like electricity, heat or water – the basic items needed to live a normal life. Unnecessary expenses can include trips to the movies, restaurants or shopping trips.
But many people have monthly expenses that don’t necessarily fit into either category, such as cell phone and cable bills, or the cost of driving, maintaining and insuring a car. Often, these expenses are higher than they need to be. If you want to save money and get back on solid financial ground you should think about cutting back on the number of minutes and text messages you purchase (as many free or cheaper alternatives exist) or whether you really need to watch all those cable channels. Also consider if you may be able to cut back on your driving expenses by switching insurers, taking steps to conserve gas and exploring alternatives such as public transportation.
During this process, you may find ways to trim as much as a few hundred dollars from your monthly budgets. For those who are deeply in debt, particularly with credit cards, it makes sense to begin sending any money that is left over to your outstanding debts. By doing so, you would be able to not only reduce the amount you owe, but new laws mandate that lenders put any additional payments above the minimum be put toward the debt’s principal, rather than accrued interest. Some people may have trouble achieving some of these goals on their own, and for this reason, it may be helpful to speak with a financial professional, such as those found at credit counseling firms. Certified counselors can help you better understand your financial situation and help you create a reasonable plan for emerging from debt and gaining financial independence that works with your budget.