Declare Your Financial Independence

Declare Your Financial IndependenceThe patriots took on the British. What's to stop you from taking charge of your finances, stretching your paychecks, and making it easier to reach your goals? The following steps can help.

Pay down debt. When less of your hard-earned money goes toward paying high-interest charges, you can have more for other goals. Paying down high-interest debt must be one of your top financial priorities.

Build your emergency fund as protection against landing in debt to cover unexpected expenses. Try to keep at least three months' worth of expenses in a money-market account.

Improve your credit record, which can help you qualify for lower-rate loans, as well as affect your ability to get a cell phone, apartment, or even a job. Check your credit report at www.annualcreditreport.com. See 4 Ways to Establish Good Credit for more information.

Save money on insurance. Having the right insurance can protect your finances, but premiums may be some of your largest expenses. See Insurance Checkup to Protect Your Finances (below) to help you find the right insurance at the right price.

Set mid-term financial goals. Instead of focusing solely on day-to-day expenses, think of what you'd like to save for over the next several years - whether it's a car, a down payment on a house, or a nice vacation. Start saving now to reach that goal without having to go into debt to pay for it.

Give yourself a retirement-savings checkup. Retirement may be a long way off, but it's never too early to make the most of your savings opportunities. See the retirement-savings calculator at www.icmarc.org/ontrack to see if you're on target to reach your goals.

Review your investments. Make sure your portfolio is in line with your goals and risk tolerance. Remember that while you're young, you have more time to weather the ups and downs of stock mutual funds. See "Choose Your Approach to Investing" at www.icmarc.org/invest

Refine your budget. Tracking where your money goes, even for a week, can help you find easy ways to improve your financial standing. Use the "Small Change, Big Savings" calculator (www.icmarc.org/smallchange) to see how saving a few dollars every day can make a big difference if you add the extra money to your retirement savings.

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