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How would you like to take that dream vacation or buy something you wanted for a while. Perhaps you had those times when you find yourself having to stretch every penny and worry about if you have enough money to pay the bills. You’re not alone. According to a survey done by Northwestern Mutual, money represents American biggest worry.
What if you could find a way that you could do away with debt? It is possible with financial stability, but how do you get from worrying about money to being free to do things you want to do. Here are eight tips that will have you own the road to living your dream life.
1. Open up a savings account
The benefits of opening a saving account include being able to have quick access to your money. A singlife savings account for instance will not only help give you peace of mind but offers flexibility when it comes time to make withdrawals. Life happens and when something goes wrong at least your money will be there when you need help with expenses.
Plus, you’re making interest while your money is in a high yielding savings account. Another benefit of saving is looking out for future problems down the road. All it takes is for one big mishap such as being out of work or a big repair bill you weren’t expecting. By building up a savings account, you’re relieving some of the money worries off of you when problems with repairs come knocking at your door and remember to keep building your fund up when times are good.
2. Start a retirement plan
Have a retirement plan even if you’re in debt. Many Americans don’t add enough money into their 401k plan. If your job offers a 401k, you’re already in a good position to add a little more. Start with a minimum of 2 per cent. You probably won’t even miss it, and you can still pay off your debt while you’re building up your 401k.
3. Do away with your debt one at a time
You can begin paying off your debt with the one that has the highest interest rate. Also, you want to pay the smallest one first. Once you paid that debt off, you will have more money to pay on another’s then another, creating a snowball effect. Furthermore, you can try and reach a settlement with your creditors. See if they’re willing to reduce your debt. Many creditors and debt collectors are willing to negotiate.
4. Invest your money
Let’s say you paid your debt off. Now it’s time to find something to invest in so that you can build up your nest egg as quickly as possible. You can begin with CDs or money market account. Invest a small amount and build it up.
5. Increase your chances of financial freedom sooner
You can do this by looking for different ways to add more money to pay off debt while socketing money into your savings account or CDs. You might have to look for an extra job or do hobbies that you love while making money for it at the same time.
6. Limit your spending
Think about what you’re spending your money on before you shell out the money for a cup of java at Starbucks. Do you really need that new outfit or going out to an expensive restaurant? Why not cuddle up with a loved one and watch a rental or better yet get a subscription from Netflix. You might even find something on TV without having to shell out any more money.
7. Envelope System
The envelope system is designed to spread your cash for daily expenses out so that you can actually see what you’re spending. For example, let’s say you have 100.00 dollars budget for movie night for a month. That’s all you’ll be able to spend what’s in the envelope and each time you do go to the movies you’ll use what is in that envelope that you have marked for movie nights. Do the same for other items such as your grocery bill, utilities. This way you’re only using the money in the envelope and be sure to write down what each envelope represents.
8. Get an education on finance
The more you read on the subject of finance, the better prepared you are to learn how to deal with your own and ended the debt cycle. Learning on what to invest your money in, will help you get the most out of your investment. If you’re planning on investing in the market, you should know the market is becoming more advanced. Educating yourself will keep you from making a bad mistake.
Remember the road to building financial freedom begins with you putting something away even if that something is one dollar at a time.