Common Sense Steps to Financial Freedom

March 16th, 2008 | Stacey | Debt Management, Financial Independence, Financial Freedom Opportunities, Financial Freedom

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Taking common sense steps to financial freedom gives us greater security and less stress. Fred Brock, author of the book Live Well on Less Than You Think: The New York Times Guide to Achieving Your Financial Freedom, offers several practical ways to eliminate debt and become financially free during these tough financial times.

-Pay off your credit cards and keep just one for booking hotels or renting cars that is paid off right away. Never carry a balance because the interest rates are very high on credit cards.

-Minimize your expenses. If you buy lunch for $8 from the deli, bring a fancy lunch from home that only costs $3 but satisfies all your cravings. If the vending machine charges $1.00 for your favorite energy bar, bring a box from home and save 50 cents on each bar. The savings will add up when you minimize frivolous or unnecessary expenses. Whatever you save during the week by cutting back reward yourself by putting it into savings.

-Use your tax refund money to pay down debt or establish an emergency fund so you don’t need credit cards in a crisis.

-Either purchase lightly used car with a warranty or use a new car completely to the end to save on depreciation by buying new cars every three or four years.

-Own a home instead of renting so you build equity and get a tax deduction for interest instead of spending money.

-Send your children to public or community college for the first two years then let them take out educational loans. After all, there are no loans for retirement so it is unwise to borrow against or use those funds.

-Get rid of your mortgage in retirement. Sell your home and retire to a less expensive area and buy a house free and clear. If this isn’t possible, consider a reverse mortgage once you are 62 years old.

Common sense steps to financial freedom will give you greater personal and economic independence as the years go by.