Financial freedom is something many of us aspire to, but unless you have a trust fund or other sources of inherited wealth, most of us have rarely achieved financial independence without a smart and consistent financial plan. On July 1st, we celebrate Financial Freedom Day. It’s a day to applaud the financial independence you’ve achieved from various investments, retirement funds and savings accounts, and also a way to recognize your future financial goals like saving for a home or early retirement. If you haven’t yet reached financial independence, you’re not alone, and luckily, there are basic steps you can take today to ensure a brighter future for yourself and your loved ones. Here are some great ways to get started:
- Pay down your debts. Create a plan to get rid of debt by using the “Snowball Method.” This method works by throwing as much extra money as you can towards your smallest debt while making the minimum payments on the higher debts. When that debt is paid in full, you start on the next smallest debt until you’ve paid them all off.
- Check your credit score. Request your free credit report from one of the three credit bureaus to start monitoring your credit health. Sites like Credit Karma and Credit Sesame offer free advice and help monitor your scores for you. They will even alert you when your score needs some TLC. Once you discover ways to clean up and increase your score, you’ll be one step closer to achieving your financial goals.
- Start a retirement fund. It’s never too late to start contributing to an individual retirement account such as a Traditional IRA or Roth IRA. You can also contribute to a 401K Plan if your company offers it. Most companies will match some portion of your contribution, so you have nothing to lose and everything to gain as you start to build your wealth!
- Invest in real estate. Investing in real estate remains one of the most consistent ways to build wealth and nurture your retirement nest egg. Buying a home or investing in a 2nd home has been the traditional way to build wealth, as shown throughout history; home prices increase, so you get a return on your investment. Even if your home never appreciates over the life of a 30-year loan, which is unlikely, you’re still building wealth with the equity you’ve accumulated over time.
- Refinance your home. Want to pay off your home faster and retire sooner? It’s possible now more than ever while interest rates remain at historic lows. Consider refinancing your 30-year mortgage or converting it to a 15-year or 20-year rate. Check with your lender to find the best and lowest rates available for your financial needs so you can pay off your 30-year home loan faster and achieve your goal of financial freedom much sooner than you ever thought possible!
- Consult a financial advisor for advice. Developing a plan for financial freedom can be difficult and scary if you don’t know much about financial planning. Without the right person to advise you, you could make a costly mistake when investing or saving for retirement. Many banks have financial advisors whose job is to help you plan for the future, and their services are usually free. Why not take advantage of these free services to help you save and diversify your portfolio?
- Create an emergency fund – Creating a comfortable cushion for emergencies is a smart move. Setting aside money for a rainy day also builds wealth for the future. And contributing to a high-interest savings account monthly can help you get there faster. Remember, it’s an account you deposit into, not withdraw from. Once you master your savings plan, you’ll be amazed at how quickly the balance grows, and you’ll be one step closer to financial freedom!
Contact a trusted lender to finance your home. The experienced loan specialists at NP, Inc. can help you build wealth by matching you with competitive loan and refinancing products that shorten the length of your present mortgage. One such loan, a “Wealth Builder Home Loan,” is a 15-year mortgage that builds equity in your home twice as fast as a 30-year mortgage. You can count on the NP, Inc. team to help you achieve your future goals, whether purchasing or refinancing! We’ll put you on the path to financial freedom by assisting you with the right loan product! Visit usmtg.com to learn more about your options and to get started on a mortgage application today!
By Susan Sherman for NP, Inc.