3 simple steps for building financial independence

By Georgie Miller

Every July 4, people celebrate our nation's independence by going camping, watching a fireworks display or grilling some burgers. Sounds like fun! Less fun, however, is living a life shackled to your debt. If you're interested in achieving financial independence, here are some tips to get you started.

1. Take a serious look at your spending

Before you can create a meaningful budget, you have to know where your money is going. How much are your monthly bills? When are they due? You may want to note which bills are optional (like cable or a gym membership) and which are not (like your mortgage or your student loan payments).

In addition to gathering information about your bills, it's also important to track your discretionary spending.

By Peter Andrew

I did it. I finally did it! Last fall, very late in life for such things, I finally lost my stock market virginity. I'm now the proud owner of shares in not one but two companies. And things are going really well. I invested $3,900 back then, and my holdings are now worth $4,900. On the night after Warren Buffet sees this article -- and who could doubt he will? -- sleep may well elude him.

Cash currently king

Of course, I'm more than pleased with how my investment has grown. And you might assume that those who have deposits today in savings accounts would be green with envy. But no. Many people make an informed choice to keep their money in cash (sometimes literally, but usually in bank accounts) rather than invest it in equities, stocks and shares. By the way, although there are distinctions in the meanings of those three words, there are also large overlaps, and for our purposes today we can use them interchangeably.

In May, the State Street Center for Applied Research found that 36 percent of Americans' assets were held in cash. Extraordinarily, that was up from 26 percent in 2012, just two years earlier. And this rise -- which occurred across all age groups and wealth levels -- was in spite of the fact that, by the end of 2013, all the three main U.S. stock indices were up at least 26 percent from the start of that year. So what is it that makes so many settle for one-twentieth the return, which is common among even the most generous high-interest savings accounts? You can sum it up in a word: fear.

By Holly Johnson

According to data released by the U.S. Department of Agriculture last year, the average cost to raise a child born in 2013 to age 18 is expected to be $241,080. Government number-crunchers examined weighty expenses such as groceries, transportation, shelter, day care, health care and education to reach this frightening figure.

The cost of raising children is definitely something to think about before you have kids. Your kids will need necessities like food, shelter, health care and education, and some of these expenses may be hard to skimp on without losing something in return. However, it is extremely easy to save on other everyday needs your children will have. Here are a few ways to do it.

1. Stick to secondhand

Thanks to garage sales and the magic of the Internet, you can find all kinds of used kid's stuff for pennies on the dollar.

By Justin Boyle

I'll just come out and say it: I did not make smart financial decisions when I was 20 years old. The things I wanted were ill-considered and the things I bought were absurd.

But as time passed, I did eventually learn to look after my money. Household budgeting -- one of the most basic principles of money management -- turned out to be so helpful that I wished I'd figured out sooner how easy it was.

Here are a couple of the world's simplest ways to get a handle on your everyday spending, in case you or someone you know -- perhaps a new graduate? -- could use some help with this fundamental money skill.

Sort your spending

Studies have shown that the average American adult has three or four credit accounts open at any given time. If that sounds like you, there's a way you can sort out your monthly spending that might also help you get a little extra value out of all those credit cards.

By Georgie Miller

I love yoga, so when I think of the word flexible I tend to think of some of the asanas I can't do (but aspire to!). However, there's more to flexibility than limber muscles. Flexibility is also one of the key concepts in personal finance.

Ideally, your financial flexibility should allow you to handle any money-related issue that comes your way with a minimum of panic or missed payments. Just how can you accomplish this? Begin with these simple steps.

1. Start an emergency fund

No, a credit card is not an emergency fund. While zero percent credit card offers may be a good idea for balance transfers and debt payoff, adding to your debt load is never a good strategy. By starting an emergency fund while times are good, the money will be there when disaster strikes. You want the funds to be accessible in case you need them. However, you probably don't want them to be too accessible or you'll be tempted to spend the money on something frivolous.

By Peter Andrew

You have a newborn baby! Congratulations. Welcome to years of sleep deprivation, decades of horrific expense and a lifetime of being petrified that something bad is going to happen to your impossibly precious offspring. Most parents envy their childless friends' clear, bag-free eyes, relative wealth and carefree existences. But almost none would swap places for the tiniest fraction of a millisecond.

Anyway, there you are, up to your ears in diapers and cooing relations, while the laundry piles up, the housework is forgotten and all you can think about is how much you need to sleep. What better time is there to ponder your baby's college fund?

Starting early pays

Unfortunately, there is no better time. A couple of years ago, The New York Times did some calculations and found that, assuming continuing inflation in college costs of just 4 percent a year, an institution that currently charges $60,000 a year could be charging more than double that by the time your baby gets to enroll. That's comes out at a cool half-million dollars for four years.