The main indicators of financial independence for women, the survey said

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While the idea of ​​financial freedom may mean different things to different people, a recent Bank of America report identified the top three areas that many women say indicate financial independence.

To get the results, more than 3,500 women aged 22 and over were interviewed about their views on financial confidence, especially when it comes to investing.

Here’s a look at the top three financial independence indicators, according to respondents, plus some simple tips to help you achieve those goals.

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Be debt free

For starters, 47% of respondents thought it was being debt free was a huge indicator of financial independence.

While some forms of debt, such as a mortgage or student loan, may offer you the flexibility to afford an opportunity or acquire an asset, for many the idea of ​​actually owing money is enough to create a feeling of dread. Many people are emotionally uncomfortable with debt, and those uncomfortable feelings are reason enough to prioritize the disappearance of their balance.

Paying off debt also allows you a little more flexibility in the face of difficult circumstances. For example, if your credit card limit was $ 5,000 and you had a balance of $ 4,500, you would only have $ 500 left to fluctuate the cost of an unexpected car repair or roof leak if you didn’t have a fund. to draw from. If, however, you had to pay off that balance, you would have even more room to cover a necessary expense if your emergency fund wasn’t enough.

There are many strategies out there when it comes to paying off debt. The popular debt snowball method is to clear the smallest debt balance first while paying only the minimum on the other debts. The idea is to work your way up to the largest balance until you are completely debt free.

Another tactic, the debt avalanche method, is to first get rid of the debt with the highest interest while making minimum payments on the others and then go down to the debt with the lowest interest rate. This particular method will help you save the most on interest.

Debt Consolidation is another strategy that can potentially help you save on interest while at the same time organizing your debt into just one monthly payment. With this option, you are essentially using a debt consolidation loan, such as the Marcus by Goldman Sachs Personal Loan or the LightStream Personal Loan, to send your funds to each of your creditors to pay off those balances. After that point, you are only left to repay the debt consolidation loan you took.

Another alternative is to use a balance transfer card with an introductory APR of 0%, such as the Citi® Diamond Preferred® card which has an introductory APR of 0% on balance transfers for 21 months from the date of the first transfer. , (15.99% – 25.99% variable thereafter; there is a balance transfer fee of $ 5 or 5% of the transfer amount, whichever is greater and all transfers must be completed in the former 4 months) or Chase Freedom Unlimited®, which has a 0% APR introduction for 15 months from account opening on balance transfers, then a variable April of 16.49% – 25.24%, to transfer the balance of a credit card with a high interest rate to a new credit card that does not charge interest fees for a limited period of time. The idea is that the 0% April introductory period will buy you enough time to make the entire monthly payment go towards the balance and not the interest, which should help you pay off the debt faster.

Being able to bear an unexpected expense

Being able to support oneself without financial help from the family

According to the survey, 34% of respondents said that not having to ask for financial assistance from their families would make them feel more financially independent.

The rising cost of living, student loan debt and wage stagnation have made it difficult for many people to keep up with daily expenses – sometimes, they have no choice but to turn to family to help bridge the gap between what they need and what they can actually afford.

While it is usually advisable to simply find ways of reducing expenses to free up money for other expenses, with a highly inflationary environment like the one we are seeing right now, there may not be much room for people to cut back by spending more than they do. already are.

If you find yourself hitting a wall with your cash flow, it may be time to consider asking for a raise at work or even moving to a higher-paying job if you can. If you’d rather stay with your current company, try taking in a secondary hustle and bustle, preferably one that you find really enjoyable, to help make ends meet.

If you choose to go the side hustle route, think about your personal skills and interests and try to find a side gig that works best for you. For example, if you have a knack for creating custom digital illustrations, think about selling them through a website like Etsy.

While doing extra work can be tiring, there are some things you can try to mitigate burnout. First, avoid doing side gigs that force you to use the same skills you are using for your daily work. If you’re already working full-time as a writer, for example, taking up extra work as a freelance writer can make you feel like a complete writing overload. Consider using another skill you already have that you can monetize so you don’t get stuck doing too much of the same thing every day.

You should also think about how much time you realistically have to devote to a side hustle each week. If you can only save 15 hours a week, you will get stressed out and exhausted very quickly if you are pursuing a secondary job that will feel like another full-time job.

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Editorial note: Opinions, analyzes, reviews or recommendations expressed in this article are those of Select’s editors only and have not been reviewed, endorsed or otherwise endorsed by any third party.

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