If you have an ING Direct account, you may have already noticed the link to We, The Savers, a Declaration of Financial Independence. It’s a ten point plan to help put you in control of your financial life. It’s designed to be printed and signed, and I think there are a lot of great points being made. I’m not going to reproduce them all here, but I am going to highlight a few.
1. We will spend less than we earn.
Seems obvious, doesn’t it? A quick survey of my co-workers reveals that a number of people either don’t do this or haven’t done it in the past and are now working to pay off credit cards. Credit cards are great tools – if you pay them off every month.
2. We will use our home as a savings account.
To me, the important points here are to have a healthy down payment and choose a mortgage that lets you pay down the principal the fastest. No more of these interest only mortgages. No more 5% down payments or worse, $0 down payments. 20% used to be the norm, and while it might be a lot in many housing markets, it’s worth the wait to keep saving.
6. We will know the cost of borrowing.
This goes along with the above. Look at the interest rates you’re paying. Look at how long you will be paying that interest rate. Know what you’re getting yourself into before you sign a contract.
7. We will invest for the long term.
This one is hard to remember when the markets are on a downward spiral. I won’t be retiring for decades. I don’t need that money now. I need it in 30+ years. Therefore, I need to remember that what happens today or tomorrow or next month is not something I should worry about.
9. We will remember what matters.
As Suze Orman says, “People first. Then money. Then things.” Our friends and our family are the most important. Then saving for our future. The items we own are not important.
10. We will be heard.
There is an election coming up. And I’m not just talking about the presidential election. I’m also talking about the other races occuring on the U.S. tickets – congressional races and state and local races as well. And Canada has an election next week. Vote. Research the candidates, make an informed choice. And write your current government representatives. Tell them what you think. Make yourself heard.
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.