Generations have sought financial independence through both economic highs and lows. Take time to reflect on what you can do to help ensure long-term financial stability for yourself and your family. Consider the following ideas and actions:
• Be true to yourself. While a competitive personality may help you get ahead in some areas of your life, no one wins when you try to keep up with "the Jones'." It is important to understand your own financial circumstances and resist the urge to match the lifestyle of those around you. Expensive lifestyles that indicate financial success may simply be a façade for big spenders. Instead of following their lead, consider your budget, long-term goals, and personal values when making important financial decisions. Pursue your own happiness within your means and the real prize – a secure financial future – will likely follow.
• Pay yourself first. This may not be the first time you have heard the advice to "pay yourself first." This guidance is relevant through all economic circumstances and life stages. Explore and take advantage of every opportunity you have to fund your savings with minimal effort. Automatically invest a portion of every paycheck into your retirement account and be sure to maximize any employer match available to you. It is also easy to set up an automatic transfer from your checking account to your savings account, or to have a specified amount regularly direct-deposited from your paycheck. A system like this makes saving a priority while also allowing you to meet your monthly expenses.
• Be realistic and be prepared. Optimism is a classic trait, but do not let this otherwise positive characteristic cloud your judgment. Have you considered what may happen if you faced a sudden job loss, long-term illness, natural disaster, or other unexpected event? Review your insurance coverage (including life, health, disability, property, auto, and long-term care policies) and ensure you and your family are properly protected. It is also a good idea to have enough liquid assets available to cover several months' worth of expenses. Though it may not be fun to temporarily squelch your optimism, most people feel more confident about the future once they know they are financially prepared for a variety of scenarios.
• Control your debt. Payments on consumer debt, student loans, and excessive car, or mortgage payments can cripple your ability to save and make you feel like you will be financially dependent for eternity. Though the best approach is to minimize how much you borrow, take control by establishing a plan that will systematically reduce the outstanding balance on any existing loans. Another bonus to systematically reducing your debt is an improved credit rating, which may allow you to access loans when opportunities that could benefit your financial position arise, like a small business venture, low interest equity line of credit, or refinance.
• Put your plan in writing. Create a written plan that outlines your personal dreams and goals, as well as the actions you will need to take to achieve them. If the financial part seems overwhelming, consider consulting a financial advisor. He or she can provide guidance on saving for retirement, funding your child's education, or working toward any other financial goal that is important to you.
The pursuit of happiness means something different to everyone. Planning ahead and establishing financial independence can play an important role, not only in pursuing happiness, but also in helping your goals and dreams become a reality.
Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.
This communication is published in the United States for Texas only; and this advisor is licensed only in the states of CA, CO, FL, MO, NC, NM, OK, TX, and VA.
M. Ahmad Adnan, CFP®, CRPC®, RFC®
Business Financial Advisor
Ameriprise Financial Services, Inc.
3200 Steck Avenue | Suite 250 | Austin, TX 78757
Phone: 512.213.6400 Ext. 102 | Toll Free: 866.238.4230
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