As we prepare to ponder the significance of this holiday, many Americans will celebrate with friends and loved ones. Numerous community gatherings will include barbecuing hamburgers, hot dogs, steaks, chickens, veggie burgers-and participating in myriad fun activities. Perhaps we all might take a little bit of time, this weekend, to also consider our personal independence, and our financial independence.
One way to start taking steps toward financial independence is to simply focus on your long-term goals, and then write them down. In honor of our holiday, you can try my strategy called DECLARE, to get you on track.
D-become debt free. This excludes any "cheap money" like a mortgage. It might be wise to keep your mortgage as long as possible, if your investments are earning more than the rate on your loan. Remember everyone's financial situation is different, so you might consider hiring an expert to assist you with this step.
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E-educate yourself. Learn about your financial life. You need to take responsibility for everything you own. This includes your investments and all other assets.
C-control your expenses! If you have children at home, make it a game to see how much money you can save at the grocery store, or when you are making a large purchase. Write a weekly or monthly check to yourself — for the amount you save — and take your kids to the bank when you make the deposit. They will start to understand that saving money is a good thing and it can be a lot of fun, too!
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L-live a healthy life. If you stay focused on good health habits throughout your life, you'll likely save significantly on health care costs. A huge benefit is that you will likely live longer and enjoy a better quality of life.
A-assess your risk. Do you need to modify your investment accounts, increase or decrease your insurance coverage? Many people really don't know exactly how much insurance coverage they need for their age and personal situation.
R-remember to save and pay yourself FIRST!
E-Enjoy life! If you enjoy-and excel at-managing your finances, by all means keep up the great work. If you don't, hire it out and get on with the business of living life to the fullest! Just be sure that you understand what your advisors are doing and that they are taking care of you!
Happy (Financial) Independence Day and have a safe holiday!