Financial freedom is something many Americans dream about. However, this reality often seems far away and not something the average Joe can do. Don’t despair. These financial essentials can help you create a financial plan that gets you out of the cycle of debt and experiencing the joys of planning for the future.
Most people don’t want to have to work into their 70s or 80s. Planning for retirement starts as soon as possible. Many employers offer retirement or pensions. For those that offer a 401k plan, maximize your contributions to equal the employer match for the most savings. Look into IRAs for further savings opportunities. Following the advice of personal finance experts such as Don Gayhardt can ensure you save enough for retirement.
Many Americans are an emergency away from crippling debt. Avoid this peril by creating an emergency fund today. Even if you can only save a few dollars a pay period, put this into a separate account. This fund can help you cover unexpected expenses such as new tires or medical bills.
A budget is essential for a single person, family or business. Track all the money coming in and going out then create a plan to use every single cent. Cover all necessary expenses then put money into savings. What is left can go towards higher debt payments or discretionary spending such as eating out or vacation. Knowing where your money goes can help you plan for the future, get out of debt and grow your wealth.
Good credit scores help you receive the best interest rates when you do borrow money on a loan. Buying a home or car with poor credit can cost you almost as much in interest payments as the car is worth. Work to improve your credit score by lowering your debt burden, not opening new lines of credit and retaining accounts for long periods of time. Credit bureaus look at payment history, debt to credit limit ratios and the length of your history when determining your score.
Look for ways to grow your income beyond simply saving more money. Perhaps you can apply for a new position with another company, take that managerial position available or go back to school to increase your income potential. Maybe now is the time to start that business you’ve always dreamed about doing. Keep your current position if possible and work at the new venture on the side until it grows in income and time.
While the last on the list, estate planning is an essential step for planning for your family’s future. A good estate plan includes all of your wishes from end-of-life care to who receives your prized fishing rod. A last will and testament is a must for every single person. This document makes it easier for survivors to move on after you pass. Some families may benefit from a living trust and power of attorney documents. Lastly, make sure the beneficiaries on any insurance or retirement accounts match your current wishes.
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