PFA is happily participating in the Carnival of Financial Goals hosted by Cash Money Life, a sort of internet-wide blogger party taking on a variety of themes revolving around various topics related to goal setting. This month’s topic is Declare Your Financial Independence.

But how do you declare your financial independence when you are afraid of losing your job, prices on everything are skyrocketing, and you can’t even afford to drive your SUV anywhere anymore?

Actually, I’ve been thinking lately that the tough economic times we are going through right now do have another side, a silver lining of sorts. That silver lining is the opportunity to make yourself over completely. Part of that make-over is out of necessity. You can’t afford to drive so you walk now and take the bus. You can’t afford your favorite supermarket anymore so now you shop at Sam’s Club and the Dollar Store and Aldi’s. The mall? Forget it. When you need new pants it’s Goodwill or K-Mart for you.

Why not take it to the next level?

Ask yourself, “If I could do anything I wanted, what would it be?” Once you have the answer to that question, ask yourself if you might be able to actually do that thing if you were free of the debt and constant purchasing your old, pre-recession lifestyle involved. Sometimes it takes a crisis to force us to look at ourselves and our world a different way.

It is possible to pay off debt, but you have to be willing to cut up your credit cards and never use them first. If you can make yourself do that, you’re halfway there. Once they are all cut up, start paying as much as you can on the one with the highest interest rate, and pay the minimum on each of the others until that first one is paid off. So say the minimum on your highest rate card is $90 and you can pay $200. You pay $200 until your balance is paid off, then you close that card and apply that same $200 on top of the minimum payment on whatever card has the second highest interest rate. You do that until they are all gone.

You can find a great list of calculators, including a calculator that shows what it will take to pay off your credit card, at Bankrate.com. Calculators are a great tool for helping you to see what is possible, and also what the true cost of credit is. For example if you carry a $15,000 credit card balance at 21% (which, sad to say, is about average in the US), and you make the minimum payment each month of $375, you will pay $34,360.87 in interest on that original $15,000 in purchases, and it will only take you 554 months (or, a little over 46 years) to pay it off. Ouch.

Now, what if throw just $15 extra a month at that debt? Couldn’t help much, right? Wrong! If you pay $390 on that same card, just $15 extra each month, you will pay the card off in 65 months, or about five and a half years, and pay $10,134.33 in interest. That’s a savings of over 40 years and over $24,000!

What else could you lose right now that would open up a world of choices? What if you didn’t have a $2000 mortgage payment? If two of you are living in a 3000 square foot newer home in the suburbs, and if you don’t plan on children soon or have already had your children, you might want to dump the mini-mansion (if you can). A modest ranch in a decent city neighborhood, or an older home with all the charm and fireplaces, will save you money on transportation and save you money on your mortgage.

If you live in the midwest, a nice older home closer in can be had for around 100K, give or take ten thousand dollars; even less if it’s a repo and you can negotiate a short sale. Even with no down payment, that’s only about $730 a month at 7% interest. If you can put $20K down on it, you’re looking at a house payment of $531!

What kind of life could you chose to lead if you had no unsecured debt and a house payment if $500 or so?

That may not be what you want at all. Maybe financial independence to you means lots of money coming in, not small amounts going out. If that’s the case, this is your moment.

When Billy Vasquez, the blogger who writes and maintains The 99 Cent Chef first started his blog on cooking with dollar store ingredients, he was getting five or six hits a day. Now he’s averaging 5 or 6 thousand hits a day, and like they say, the hits just keep right on comin’. In times of crisis, the person with the bright idea gets the cash, and it doesn’t have to be a bright idea that costs a lot of money to start up.

I’ll be honest with you. I took some of my own advice last year in late October, early November. I wanted my unsecured debt to be gone, I wanted to do something I cared about more than my depressing day job. Specifically, I wanted to write for a living, something I equated to wanting to be a Ballerina or Space Barbie. That was my general sense of how possible my goals were.

As of today, I’ve paid off my car and two credit cards, and have two cards left to pay off. In March, I cut back my day job to 20 hours instead of 40, because I was so deluged with writing work I could not keep up, and what’s more, it paid better. Last September, if someone had told me that was even possible, let alone that it would actually happen, I’d have laughed myself silly. Yeah right! And yet, here I am. Currently I’m looking for a way to ditch the day job altogether (hint: health insurance is the stickler), because I have a couple of book ideas I’m pitching and my freelance work continues to grow.

None of this would have happened for me though if I hadn’t taken some time to 1) figure out what it was I really wanted in my life (I’m 55–midlife crisis time, dontchaknow), and 2) DECLARE MY FINANCIAL INDEPENDENCE, which is known less dramatically as goal setting.

Knowing what you want isn’t half the battle: It’s 99% of the battle.

What do you really want? It might just be that the world is waiting to give it to you.