Everyone has a different definition of financial freedom. For some it’s not living paycheck to paycheck, for others it’s retiring early, and the various meanings go on and on. Financial freedom is truly personal and individual, but Miami Beach accountants know that however you define being financially free, there are habits that can get you closer to that goal. Continue reading this accounting blog for successful financial freedom habits that are easy to take on.
Financial Freedom Habit #1
For starters, truly define what it means for you to be financially free. Your Miami Beach accountants suggest getting very detailed such an exact amount of money you want to have in your bank account. By when do you want to have those funds? What are you willing to do in order to achieve that goal. Continuing education? Attribute more money into your savings account? Move to smaller house for a smaller mortgage?
Financial Freedom Habit #2
Pay off your credit cards fully, do not get sucked into the vicious cycle of high-interest rates and remaining balances from month to month. The Miami Beach accountants recommend placing your credit cards at the top of your list when it comes to paying off debt. Student loans, small business loans, even personal loans typically have lower rates, so you can take a bit more time to pay them in full. If you have multiple credit cards, try transferring balances to a lower interest rate credit card.
Financial Freedom Habit #3
Save without thinking about it. Setting aside money for a rainy day is hard to do, but Miami Beach accountants suggest you save automatically. There are many ways to do that. For example, you can set up scheduled automatic withdrawals from one account to another. You can also enroll in your employer’s retirement plan and take advantage of their matching contributions. There are apps such as Acorns that can also help you save automatically. Acorns rounds up your purchases to the nearest dollar and then puts the spare change in an investment account. Direct deposits are another way to do, by allocating specific amounts to various accounts.
Financial Freedom Habit #4
Even better than living within your means is to live below them. You certainly don’t want to keep with the Kardashians or the Joneses, but you also want to make sure you’re being frugal. Make an inventory of your regular purchases and find better prices for everything. From the grocery store to vacations to rent and the car you drive, everything you use can be found at a cheaper price. Live minimally, but comfortably and watch out for impulse buys.
Financial Freedom Habit #5
How’s your credit score? A person’s credit score influences the many payments he or she makes every month. Car insurance, mortgage rate, life insurance premiums, loans and so on, how much you pay for those depends on how good your credit is. Did you know payment history affects your credit score by about 35%? How much debt you have also counts toward your credit score, by about 30%. Your Miami Beach accountants remind you to handle your debt payments in time and be financially responsible.
Are you ready to be financially free?