The word “financial” is not often followed by the word “freedom,” and yet financial freedom has never been more possible. With the advent of online money-making platforms, the constant influx of new products that yield substantial returns, and the continuous stream of budgeting ideology that floods the marketplace, we should be one of the most financially sustainable generations in history. The missing key for unlocking this possibility is very easily just an understanding that we aren’t supposed to be led by our money- we are supposed to be in charge of it.
So what can you do differently to make sure that you have the say over what happens with your money and that your future is financially secure? There is always something you can do to improve in every area of life, especially in money management.
If retirement is on the horizon, make sure you have all of your real estate ducks in a row. Do your best to have your mortgage paid off before you retire to avoid having a payment to contend with when you’re no longer working. If you have successfully decluttered as your children have grown and as your interests have changed, it may become clear that your house no longer fits your needs. If it’s time to downsize, you open up more opportunity to save: by selling your home and moving into a smaller house, you can pad your savings with extra money to help with assisted living or medical costs down the road. Or you could add some real estate to your investment portfolio. Maybe it’s time to get the vacation home you’ve been eyeing — you can always offset payments by renting it out when you aren’t using it.
Next, consider your budget. Unfortunately, only a third of the American population admits to keeping some type of budget for their income. For those keeping score at home, that means two thirds of Americans don’t layout or maintain a plan for their finances. The point is simply that if you aren’t sure where your money belongs on daily basis, it will be harder to plan for the future.
Have you ever taken a road trip to a new vacation spot without a map or a GPS? Having a plan makes all the difference in whether you successfully arrive to your destination. A budget is a plan of action, meant to navigate you through your future. You can start the easy way, by separating your finances into three categories: money for charities, money to save, and money to spend. Once you have determined the percentage of your income that belongs in those major categories, you can break it down further and be as detailed as necessary. There are several ideas behind budgeting worth considering, and you can use the one that best fits your lifestyle.
Before you know it, budgeting will become second nature and you won’t have to question where your money has gone. By the end of the year, you will likely be surprised at how much you were able to save based on your projected plan. Your budget will also help smooth out the tax filing process, because you will be fully prepared with the financial details that you are asked to include in the paperwork.
If you are over 50 years of age, you won’t have to use that hard-earned, well-saved money on hiring someone to help. The AARP organization has a program that provides a volunteer to assist you with your taxes, and for those over 60 years of age, the IRS provides a similar service through TCE volunteers. All you have to do to take advantage of either opportunity is to contact a location closest to you to set-up an appointment.
After you have used all of the applicable senior tax deductions and benefits, you can use your substantial refund to build an emergency fund, invest in a small side business, or increase your savings account. You could make an extra payment on your home or use the money to upgrade a few things around your house. Then, sit back and enjoy the fruits of your labor, delightfully knowing that you have handled your money the smart way.
A healthy handle on your bank account is just a financial blueprint away. Making savvy real estate decisions, budgeting, understanding what tax benefits are available to you, and carefully managing your tax refund are all easy stepping stones toward financial freedom. Don’t be overwhelmed by the future, but be excited about the possibilities.