In today’s day and age, many Americans struggle financially. Three of out every four Americans are living paycheck to paycheck and about fifty percent of Americans don’t even have $1,000 in their savings. In fact, many people don’t even have any money saved for their retirement accounts. How are they going to live after they retire? Social Security? I think it’s safe to say that we need to educate our kids about money and we need to do it earlier. If we don’t, this financial problem will continue to happen. In this article, I’m going to be breaking down three simple steps that you and your family can implement to be better off than the rest of America.
1. Make budget
If you want to gain any sorts of financial freedom, you are going to have to make a budget and know where every dollar is going every single month. You have to have the discipline to stick to the budget no matter what. Also, you want to make the spread between your income and expenses as large as possible. This allows you to either pay off some debt, put extra money into savings, or invest it. All in all, you should make a written budget with your partner every month and the budget should be unique to that given month.
2. Put some into savings
As I previously mentioned, you want to increase your spread between cash inflow and outflow as much as possible. A good goal is to save at least 15% of your income. Your main goal should be to get that number up to 30%. I would definitely include savings in your budget every month. However, you need to remember that you are not saving to save or saving for a new truck that will depreciate. You are saving for an asset that you can use to build more wealth.
I hinted on this in the previous section. Once you have enough money put away into savings, it’s time to put that money to work. You can either put that money into a stable retirement account like a 401k or an IRA, invest it into your own business, or invest that money into yourself. The good news is that if you invest in the last investment I mentioned, you’ll never lose money on it.
All in all, it’s about making money, keeping that money, and investing that money for your future.