Five Tips to Improve Your Financial Health
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If you’re in your late twenties, or maybe are at that point in your life where you’ve established your career, it may be time to highly consider investing. While investing sounds intriguing, many people ask the same questions – how do I invest, and where do I start? And if you are investing, you may not know the best and most efficient ways to track how those investments are doing. Here are five tips on how you can improve your financial health for the future.
1. For retirement, try to save between 10-15% of your annual pre-tax salary.
Whether you’re in your 20s or 30s, it’s never too early to start saving for retirement. When it comes to putting money aside for retirement, you should be setting aside at least 10% of your earnings. By doing so, you can slowly begin to save up over time, and the interest on your account will compound, contributing to the total amount in your retirement account.
2. Decide how much money you’ll need to save to support your retirement lifestyle.
What’s your plan after retirement? Do you want to travel the world? Do you enjoy dining out often? These are just a few questions to ask yourself when it comes to saving up for retirement. By knowing the lifestyle you wish to live later in life, you can decide how much money you’ll need to save for your retirement fund.
3. Create age-related savings goals for your retirement.
Instead of saying you want a specific amount of money by retirement, you can create small goals to ensure that you’ll reach your ultimate retirement goal. For instance, every 5 years, write down the amount of money you want to have in your retirement account. This way, you’ll hold yourself more accountable and can keep yourself on track to reaching your final goal by retirement.
4. Add 1% more to your retirement fund.
When you think about it, 1% truly doesn’t feel like much, but in the long run, it’ll add up. To start saving now, try adding an additional 1% out of each paycheck to put toward your retirement savings. You’d be surprised how easy it can be to live without the additional 1% each pay period.
5. Determine your net worth.
While you can calculate your net worth on your own by subtracting your liabilities from your assets, you don’t have to. By calculating your net worth, you’ll be able to get a better idea your financial health and what you need to do in order to reach your goals. Some websites offer free tools that can do this for you, so you don’t need to worry about doing it on your own.
Now that you’ve discovered these tips, you can help get your financial health sharp for the new year. If you’re ready to reach financial freedom, get your free financial tools today.