Achieving financial freedom is a goal that many of us share. Generally, it means having enough savings, living within your financial means and setting aside money for retirement. By setting SMART financial goals, you can start working towards them now in order to achieve them as you approach an older age and enter into new phases of life. What’s meaningful in your 40s and 50s compared to your 20s and 30s is probably quite different. Perspectives change as you grow older and become wiser. If those who are in their 40s and 50s looked back on their younger years, they may have some sage financial advice they would’ve shared with their younger selves to create a financially bright future. Here are 8 tips to help put you on the path to financial freedom.
Tip #1. Pay Off Your Credit Card Debt
This may sound simple, but it’s one of the best things you can do – pay your bills on time. By far, one the most important actions you can take in your 20s and 30s is to manage your credit card debt and try to pay it off as soon as you're able to. When you pay off your balance each month, you avoid interest. Plus, it boosts your credit score, which is beneficial later in life to help unlock savings and benefits like getting better interest rates on loans. Use this calculator to see how long it will take to pay off your credit card.
Tip #2: Keep Tabs on Your Credit
Monitor your credit and be sure to avoid these mistakes. Whether you’re buying a car or buying a house, good credit is key in achieving financial milestones, whether you’re building it, maintaining it or trying to improve it. At Lakeland, we offer Credit Sense, a resource to monitor your credit score, access your full credit report and tips to boost your score. Be sure to utilize all of the available resources to make sure you maintain a good credit score!
Tip #3: Pay Down Your Student Loans
Simply put, the more you pay off your student loans now, the less you’ll pay later in interest. Extra payments can help you pay off student loans more quickly. This alone can save you literally thousands of dollars over the life of your loans. Calculate the feasibility of your student loan repayment.
Tip #4: Start Building Your Retirement Nest Egg
Begin to build a retirement nest egg when you’re young by squirreling some money away each month. Compounding interest will work in your favor over the years, so the sooner you start saving, the more you will have. Speak with one of our financial advisors to develop a personalized plan for your retirement.
If your company offers a 401(k) program, don’t pass up the opportunity to participate. Getting the most from your 401(k) plan is one of the best things you can do. Does your employer match your 401(k) contributions? If you work at a company where your employer offers this, they’re putting money into your retirement account too. It’s essentially free money!
Tip #5: Set Up an Emergency Fund
Imagine if you lost your job, were dealt large medical bills, or your car needs extensive repairs – Are you financially equipped to pay for these emergencies? Things happen and can unfortunately set you back, so it’s smart to be financially prepared for the unexpected with an emergency fund. Having an emergency fund helps you cover and pay for those unexpected expenses without having to go into debt or reach into your savings.
Tip #6: Negotiate Your Salary
You nailed the job interview, and an offer is on the table. Congratulations! Before you accept the position, it’s the perfect time to discuss salary and see if it makes sense to discuss a negotiation. The time between being offered a job and accepting it is the most favorable time to exercise your bargaining power. Negotiating your starting salary may be uncomfortable and unnerving, but not doing so can leave money on the table and add up to a big sum lost over time.
Tip #7: Lease vs. Purchase a Car
To buy, or not to buy? That is the question. To buy or lease a car is not a simple decision and you should carefully examine which method is right for you. Buying usually means you need to get a car loan and make higher payments, but in the end, you will own your car. Alternatively, a lease has lower monthly payments, and may allow you to get a vehicle that is more expensive than you can afford to buy. However, when your lease is up, the car does not belong to you. There are pros and cons to buying or leasing a new car. Running the numbers can help you figure out which option may be the one for you.
Tip #8: Weigh the Pros and Cons of Renting vs. Buying a Home
Is it better to rent or buy a home? There is no universal, one-size fits-all answer to this question. It really depends on your financial situation, lifestyle and many other factors. These days, home prices are at all-time highs, but mortgage rates continue to stay at all-time lows. Comparing the costs of renting vs. buying can be a good place to start to determine which option is better for you.
Setting yourself up for a financially stable future starts with small steps to grow your savings, boost your credit, and crush your debt. It may sound intimidating, but you’re not alone. Lakeland Bank is a financial friend you can bank on! The future you will thank you. For more financial tips and resources, check out our financially brilliant blogs, calculators and upcoming webinars.
Lakeland Financial Services is a division of Lakeland Bank.
Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC, and are not insured by bank insurance, the FDIC or any other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank, and are subject to risks, including the possible loss of principal. Lakeland Bank and Lakeland Financial Services are not registered broker/dealers and are independent of Raymond James Financial Services. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.
Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.
Raymond James financial advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered. Therefore, a response to a request for information may be delayed. Please note that not all of the investments and services mentioned are available in every state. Investors outside of the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site.
Any opinions are those of Lakeland Bank Financial Services and not necessarily those of RJFS or Raymond James.
