July 4 is Independence Day
Financial independence can mean different things at different stages of life. It eventually means the ability to live solely off savings and passive income—also known as retirement. But if you are nowhere near retirement, financial independence usually means being able to comfortably pay bills on time, have robust savings, and be prepared for emergencies. Consider taking these steps to celebrate your very own Independence Day:
- Make paying off debt a priority. Focus on credit cards first and systematically work your way through your other debts until all balances are zero.
- Build an emergency fund by setting aside a small sum of money from every paycheck. Set up your account so the money is moved to your savings automatically, leaving no room for error or temptation. Start with a goal of accumulating one month of emergency funds, then keep adding on from there.
- Live below your means, no matter what the Joneses are doing. You can still have a few luxuries here and there, but be sure to choose those things wisely and don’t let an occasional luxury become a regular indulgence.
- Don’t neglect retirement saving. If it is offered, you should contribute to a retirement fund through your employer as soon as it is available—at least enough to get any offered company match—and increase the amount you contribute as your salary increases.
Creating and sticking to a budget is the best way to help yourself achieve any financial goal. Remember that a budget is not a constraint to keep you from spending money on fun. Think of your budget as a set of rules you can follow to make your financial life simpler and help take the guesswork out of money management. Find out more about smart saving, budgeting, and more!
The information mentioned in this article is for informational purposes only, is intended to provide general guidance and does not constitute legal or tax advice. Each person’s situation is unique and may materially differ from the information provided herein. You should seek the advice of a financial professional, tax consultant and/or legal counsel to address your specific needs before any financial or other commitments regarding the issues related to your situation are made. Banco Popular North America does not make any representations or warranties as to the content contained herein and disclaims any and all liability resulting from any use of or reliance on such content.