Most people have general desire for financial freedom at all stages of life. Having financial independence gives us the luxury of more options in life, the ability to build wealth for ourselves. We all want to be financially free.
What to keep in mind financially this coming new month.
- Income Management
- Income Protection
- Long-Term Investment
Income Management
Managing your finances begin as soon as you receive your pay stub. When I first started as a nurse, I didn’t even look at my earnings. I always thought the taxes were so high, I’d just feel bad looking at my net pay. But, it’s really important to see where your money is going including the deductions for your retirement account (401K, 403B or 457B). You want to look at Medicare, social security, vision/dental/medical insurance and federal and state taxes.
Your net pay, or what is left over after all these deductions will be allocated for expenses. After the expenses, I allocate a portion of my income to investing for the future.
What you do today will dictate your life in the future. Investing is one way to make your money grow and work for you. I wish I knew about investing many years ago. Some of the investment accounts I recommend is a ROTH IRA and a HSA account.
Income Protection
Your single most valuable asset—assuming you’re not close to retiring—is your earning power. This is your foundation to becoming financially independent. This is why it’s so important to remember that Health is Wealth to always take care of yourself. It’s also important to have an emergency fund because your ability to earn is not guaranteed.
Read Why Emergency Fund is Important.
While it is difficult for us to face our mortality or thought of being disabled, planning for it and adequately transferring risk can help ease the burden you and your loved ones may have to face later on. Some employers offer disability and life insurance policies, but their coverage may not be enough depending on your personal situation. You should always read your company’s policies carefully before making any changes.
Long-Term Investment
It’s never too early to save for retirement. Investing early is so crucial. When it comes to opening up your IRA account, time is of the essence. The longer your investment horizon, the more time your money has to work for you. Therefore, you shouldn’t delay any longer. You need to let compound interest work.
Investing for retirement does not need to be complicated.
Read Investing in Index Funds to be a Millionaire when you Retire
What Else Can You Do?
Make sure you’re making what you deserve! Negotiate your salary!
