Declare Your Financial Independence: Virginia CPAs Offer Tips

Are rising gas prices, mortgage woes and credit card debt weighing you down this holiday week? It’s time to start your journey toward financial freedom! Though money worries won’t disappear overnight, the Virginia Society of Certified Public Accountants (VSCPA) offer the following five steps to help you declare your financial independence.

1.  Set clear financial goals

You’ll never achieve financial freedom if your goals aren't specific. Whether you're saving for a down payment on a house, a new car or a college education, it's important to monitor your progress. Virginia CPAs say establishing financial goals should be your first step when working towards financial independence. Write down your goals on paper and then plan how you’re going to achieve them.

2. Pay down credit card debt

When writing down your financial goals, lowering your outstanding credit card debt should be a top priority. Credit cards typically carry high interest rates that drain cash that you could be using for more worthwhile purposes. To reduce your debt, resolve to cut back on other expenditures so that you can use these funds for credit card bill payments. Also, consider ways to lower the interest rates you are paying. Call your credit card company and see if you can negotiate a better rate. If that doesn’t work, transfer your balance to a credit card with a lower rate.

3. Boost your savings

We all know that saving something each week is a good idea, but we can easily forget to do it. That’s why it’s a good idea to enroll in an automatic savings plan at your bank or a 401(k) plan through your employer. Remember that you don’t have to settle for a low-interest savings account. Some mutual funds accept initial deposits of as little as $50 or will even waive the deposit requirement if you agree to save a certain amount each month. Many people aim to save whatever remains at the end of each month but find that there’s little left. When you designate an amount for automatic savings, it becomes a part of your regular budget and can’t be forgotten.

4. Review your insurance policies

Ensuring that you have adequate insurance coverage is vital to protecting your family and your assets. Important policies to review include health, life, disability, automobile, and homeowners’ insurance. Making a checklist of your policies and the amount of coverage you have will help determine whether changes in your financial and family life warrant adjusting coverage.

5. Make tax planning a year-round activity

While some tax-saving activities can be executed at year-end, others require time and planning. Examples include offsetting investment gains with losses, shifting income, restructuring your debt to take advantage of tax-favored borrowing, and maximizing your itemized deductions. The summer is the perfect time to evaluate your tax situation and take steps to reduce your tax bill next April.

If you need help along your path to financial freedom, consult with a CPA, who can help you develop a solid financial plan. Your CPA will work with you to ensure 2008 is the last time you need to declare your financial independence.
Visit the VSCPA’s consumer Web site, www.FinancialFitness.org, for more money management tips and free resources.

The Virginia Society of Certified Public Accountants (VSCPA) is the leading professional association dedicated to enhancing the success of CPAs. Founded in 1909, the VSCPA has approximately 8,300 members who work in public accounting, industry, government and education. For more information, please visit the Press Room on the VSCPA Web site at www.vscpa.com, e-mail vscpa@vscpa.com or call (800) 733-8272. To search for a CPA in your geographic region, visit www.FinancialFitness.org and click on “Find a CPA.”