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Financial independence means something different for everybody. But the path is pretty much the same. It’s paved with very straightforward steps. They’re steep in the beginning. But they level out down the road. The problem is that it’s easy to get sidetracked. Here are some hazards to avoid and habits to follow to help you stay the course.

Don’t Borrow to Buy Consumables

Credit is an essential part of your financial life. For example, most Americans use a mortgage to buy a house and many people use student loans to pay for college. But buying everyday items on borrowed money is way too easy. So, it requires discipline.

If you pay for things you’ll use once, throw away or eat with credit cards, then make sure you pay them off when the statement arrives. Don’t finance intangible things that have a finite life.

Sure, use your credit cards to buy those items. Just don’t build up big balances doing it.

Stay out of Debt

If you must carry a credit card balance for something unexpected or truly necessary (car repair, a new refrigerator, etc.), just make sure you have a plan to eliminate the debt in short order. Those balances can come at a high price.

The longer you take to get rid of your debt the more money you’re spending on interest, the less you have for savings and the longer it’ll take to achieve financial independence.

And credit card balances may make future borrowing more expensive.

Improve Your Credit Score

Carrying balances is one of the main criteria affecting your credit score. The higher your balances in relation to your limits, the lower your score is going to be. No biggie, right? Wrong!

Your score reveals how disciplined a borrower you are. Big balances suggest that you’re spending more than you can afford. And lenders are totally okay with that. They just price it into their loans.

Lower credit scores translate into higher interest rates. A high credit score (the range is 300-850) may lower future financing costs.

So, improving your credit score could save you bundles of money over the course of your life.

Prepare and Live by a Budget

A budget is the foundation for everything else.

Figure out where you’re spending your money. Keep track of it. And cut frivolous expenses. Opt for less expensive brands, eat out less, put off luxuries, live beneath your means.

Every dollar you spend on consumables is gone forever. You never get it back; however, every dollar you save has an opportunity to grow. Invested judiciously, those dollars may multiply over time. You can’t reach financial independence without this.

And put savings into your budget! It doesn’t need to be a big number. It just has to be a positive one. Treat your savings like it’s one of your regular bills. It needs to be paid promptly every pay period.

Create an Emergency Fund

Okay, there’s a chance that something unexpected is going to trip you up on your journey to financial independence. That’s why your savings plan must include an emergency fund. Don’t save for anything else until you have six to 12 months’ of income tucked away in that fund.

Invest for Expected Goals

When your emergency fund has a healthy cushion tucked away in an account that doesn’t expose it to a bunch of risk, it’s time to start investing for future goals.

Various goals should be financed using investments that roughly correspond to their specific time frames. In other words, the investments are expected to reach full potential around the time you need the money.

So, short-term goals get financed with short-term investments; long-term goals with long-term investments. Less risky assets might be used to finance immediate goals and riskier investments might be used to finance far-off goals.

You should also contribute as much money as possible to retirement accounts like a 401(k), an IRA or the TSP. Try to max out that contribution as early as you can.

Talk With a Professional

Now, don’t do this stuff on your own. Talk to a professional who can answer questions and make sure you’re on course for the long haul. You’ll find that person by calling (800) 235-8396.

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