Declare Your Financial Independence: Pay Off Debt, Start aRainy-day Fund
It’s Fourth of July weekend once more: time to celebrate the independence of this grand nation we live in.
Independence Day is a holiday to look forward to. After all, it is arguably the most fun of them all: fireworks, picnics with friends, parades, barbecues, carnivals and fairs, concerts, baseball (and world cup soccer) games, special sales (cars, mattresses and more), and many other events celebrating the history and government of the United States.
While we celebrate such an important holiday, I can’t help think about the millions of Americans who cannot claim their financial independence: 27 percent of workers have less than $1,000 in savings (excluding the value of homes and pensions if any) according to the latest stats from the Employee Benefit Research Institute (download full report in PDF format). Another 27 percent have under $25,000. In addition, most Americans (76%) have some debt, with 87% of them saying they carry debt other than a home mortgage, according to a recent survey by Lending Club.
Clearly, the best way to declare your financial independence this weekend is to take decisive steps to pay off your current debt and start a rainy-day emergency fund.
Pay off Debt
To pay off your debt, start by negotiating rates with your credit card issuer while setting up a budget for getting rid of debt balances, starting with the most costly first. You can also obtain a peer-to-peer personal loan with Lending Club at better rates.
Start an Emergency Fund
To build your emergency fund, start by setting aside a monthly amount that you can commit to stash away consistently: plan to build up a cash cushion capable of covering three to six months of living expenses.
So what are you waiting for? Get started today! Declare your financial independence.
Want to learn more? Read on with this collection of articles on the subject by top personal finance bloggers:
Get Rich Slowly: How and Why to Start an Emergency Fund
Wise Bread: Figuring the Size of Your Emergency Fund
One Money Design: Emergency Fund Versus Getting Out of Debt
Hundred Goals: Debt or Savings?
20 Something Finance: Emergency Savings Fund: Why, How Much, and Where?
Financial Highway: Factors to Consider When Setting Up an Emergency Fund
Consumerism Commentary: What Comes First? Paying Off Debt or Starting Emergency Fund?
Free Money Finance: The Ten Worst Money Mistakes Anyone Can Make
Generation X Finance: The Importance of Creating a Savings Account
Image courtesy of Beverly & Pack.