The economic decisions that you make on a daily basis have a direct impact on your financial future. Your decisions can either set you up for a nice comfortable retirement or force you to work much longer than you ever planned. If you want to get on the right track to a successful retirement then take a look at 5 decisions that will make your financial life a whole lot easier.
1. Starting a Roth IRA
When it comes to retirement planning, remember to save early and save often. One of the best ways to start saving for retirement is by opening a Roth IRA. Anybody that is over the age of 16 and has earned money can start contributing to a Roth IRA. Even if you already have a 401k, opening a Roth IRA can be a smart move. It enables you to let your money grow tax free and withdraw it whenever you wish at retirement age.
2. Saving for Your Kid’s College
One of the biggest expenses that can drive parents and kids into debt is paying for college. College loans can cripple your finances for 10 to 20 years. You can avoid this stress with a little planning. It’s never too early to start saving for college for your son or daughter. The best time to start saving is as soon as they are born. You can open a 529 plan or a Coverdell Education Savings Account. Be sure to research plans in all 50 states and pick the one that best meets your needs. Planning for college early will save you more money later.
3. Paying Cash for Your Cars
Instead of financing your next automobile purchase, consider paying cash. Buying a new car is a great feeling until you have to start making car payments. Why spend 5 or 6 years paying off a purchase that will only go down in value? You can save yourself some dough by buying an affordable new car or a quality used car. It may mean that you can’t buy that $30,000 car that you want but you will be much happier not having to make car payments for 5 years.
4. Going Back to School
Much of the financial advice that you read always deals with cutting expenses. Trimming expenses is important but increasing your income is equally as important. If you want to make more money, go back to college or learn a new skill. Both of these things will help you make more money. In an increasingly competitive job market, going back to college is one of the best ways to increase your earnings power. An undergraduate or graduate school degree can help add a few more zeroes to your paycheck.
5. Developing Multiple Streams of Income
Too many people rely on their job for their only means of income. This is fine during prosperous economic times but when the economy turns sour you could lose your only means of support. That’s why it is so critical to have multiple streams of income. You can start a side business from the comforts of your home. Do you enjoy writing? You can start blogging or do freelance work. If you make decorative items, start selling them on eBay. There are numbers of different entrepreneurial ventures that you can start to boost your income. So, get going!
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