This time of year, independence seems to be the dominant theme.  With Juneteenth just behind and the Fourth right in front of us, freedom is a major cause for celebration.  This short stretch offers us a great opportunity to reflect on the privileges we enjoy and to consider our progress toward our country’s founding ideals of life, liberty, and the pursuit of happiness.

Of the many facets that make up our freedom, financial independence is one that countless Americans desire but find difficult to attain.  This is a result of numerous, complex factors, of course, but for some, the solution lies within reach.

 

In the next month, consider making the following modifications as you strive toward a lifestyle of financial freedom:

 

Utilize credit wisely. 

For the vast majority of Americans, participation in the economy largely depends on access to credit.  This is why there is such a clear emphasis on building and maintaining a healthy credit score.

  • In your quest for financial freedom, begin by enumerating and evaluating your existing credit obligations.

  • If you find that you’ve overextended your budget, identify debts that you would like to clear in a timely manner. Start by chipping away at smaller balances and/or balances that are being charged at higher interest rates.

  • As you look to make additional purchases on credit, assess whether or not you have the wherewithal to cover the added monthly expense. If you don’t think you’ll be able to make the regular payments, postpone the purchase until you can truly afford it.

  • The golden rule for protecting your access to credit is to live within your means. This is the surest and safest way to secure financial independence.

Examine your needs versus your wants. 

If the latter begin to outnumber the former, you may need to hit the reset button.  After a while, certain excesses start to look like essentials --- now’s the time to put them back in their place.

  • It’s easy for all of us to mistake certain wants for needs. A good question to ask yourself is: Is this something that is absolutely necessary for me to make it from day to day and month to month?  If not, you may need to recharacterize that thing as a want.

  • Though difficult at first, eliminating certain wants can be downright liberating. This process of simplification --- which allows you to declutter your budget and free up discretionary cash --- is a big step toward financial freedom.

  • It’s worth clarifying, though: budget simplification doesn’t need to turn into a scorched-earth campaign. For instance, if you feel that your gym membership is vital to your physical and mental wellness, don’t get rid of it just because you may not use it every day.  If you really feel squeezed to lower costs, perhaps consider switching to an at-home program and/or saving for exercise equipment.

Monetize your strengths. 

If you find yourself in an industry that you enjoy and that’s well-suited to your aptitudes, work to increase your expertise and seek out greater responsibility.  There’s no better way to pursue long-term financial stability than by making yourself indispensable to your organization.

  • Do you lack passion or feel that your strengths are mismatched with your current line of work? Explore other avenues that might provide you with more growth opportunities and greater earning potential.

  • Look around at your present workplace. Is there another department in your company that you’d like to consider?  If feasible, try to mobilize within.

Don’t budge on your savings goals. 

Once you’ve freed up cash in your budget, funnel some percentage of it into your savings.  Fight the temptation to dump your discretionary funds into frivolous purchases.

  • Establishing a savings account of some kind is a need, not a want. Treat it like paying a monthly bill, such as your rent and utilities.  That way, it will become ingrained as a non-negotiable in your spending routine.

  • If your organization offers something like a 401(K) or 403(B), take full advantage. Sure, it will deduct a small portion from your paycheck, but many companies will match up to a certain percentage of contributions each pay-period --- that’s essentially free money!

 

This month, as we celebrate the many freedoms that we possess, take a moment to reflect on your financial goals.  These four steps over the next four weeks will set you well on your way to the financial independence that you desire!