Your life should be about more than working, climbing the career ladder, and then eventually settling into a meager retirement . At the end of your working life, you'll have worked hard enough that you will probably want to have the kind of control and options that only come with true financial freedom . To attain those goals, you have to make financial freedom a priority in your life--starting now. Here are 3 tips that can allow you to do that.
- Max out your 401(k) to get the employer match
A 401(k) is an employer-sponsored retirement account that allows you to accrue savings while letting those savings grow on a tax-deferred basis. That means instead of having to pay taxes on your growth, which then reduces your account balance, you can continue to pile growth on top of growth and not pay taxes until you start taking money out of the account.
Another reason 401(k)s are a great way to prioritize eventual financial freedom is that employers usually offer a matching incentive where they match a portion of your contribution by making one of their own into your account (up to a limit). This is such a valuable benefit because it's like getting paid a little bonus every single time you contribute to your 401(k). You can even invest their match and let it grow your wealth even more.
- Be smart with your raises
When you get a raise, either from an annual review, a merit increase, a promotion or a new job, it's important that you don't waste that raise by using it to increase your cost of living. Instead of applying the raise to a new car new home or other ongoing expenses, consider using it to pay off debt or to increase your retirement savings . When you are dedicated to making financial freedom a priority, you must be more focused on saving toward that outcome than you are on spending money here and now. That mindset should make it easier to take newly acquired funds--such as raises--and put them away for later. After all, you've already been living without those funds before you got the raise--so it's not as though you'll miss them.
- Consolidate your finances
Financial consolidation is the process of taking multiple accounts and putting them together so they are easier to manage and you get a broader look at your overall financial picture. Most people are probably familiar with the idea of fiscal consolidation through the concept of debt consolidation. Because the average American consumer holding onto close to 4 credit cards , debt consolidation can be a very valuable tool. It can offer you a single payment to make, which means fewer chances of late fees. It can help you reduce your overall interest rate, and it can give you a no-nonsense look at your total amount of credit card debt . There are other options for consolidation, including the consolidation of multiple checking and savings accounts. Doing so can increase your account balances so you can take advantage of free account and higher interest offers. It also helps you to see the truth of your wealth accumulation progress and brings a strong dose of reality if you are falling behind.
The idea of financial freedom may seem fantastic and impossible, but it's not. You can do it over time, as long as you stay focused on making it a priority. And while that can often mean delaying gratification so that you are spending less now than you otherwise would, the power and control it ultimately grants you will likely make the sacrifice worth it.
Jeremy is a tech and business writer from Simi Valley, CA. He's worked for Adobe, Google, and himself. He lives for success stories and hopes to be one someday.