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Posted On August 02, 2018
You probably see dozens of articles a day about how to save more money or manage your expenses better. While bringing your lunch to work and ordering water instead of soda or beer when you go out can save you hundreds of dollars each year, simply saving money is not enough to build wealth. If you’d like to convert your mattress stash to the extra cushion you really need to retire early, it’s not about how much money you save, but what you do with that savings.
Choose the Right Savings Account
Increasing your savings can be as easy as switching to a higher interest savings account. There are numerous types of savings accounts, for example a Money Market Account, which will pay higher interest on an account that maintains a higher minimum balance. If you get a bonus, inheritance, or other windfall, meet with a financial advisor to determine how much you should save and how to invest the rest appropriately.
Maximize Your 401K Match
If your company matches 401K contributions, take advantage of it. The earlier the better for this one! Since 401K contributions are pre-tax money, you’ll also be lowering your taxable income level and saving there too.
Know Where Your Money is Going
Financial awareness is critical. This goes for everything from your monthly subscriptions to your bigger investments. Automated payments are easy to set up and forget about. Review your monthly bank statements and credit card bills to make sure everything you’re spending is necessary. When it comes to playing the stock market or other investments, consider working with a financial advisor to set a long-term plan.
Finance with the Right Mortgage
A home is the first appreciating asset most Americans will own. Your mortgage is also, most likely, your biggest debt. From the down payment to the terms, every facet of your mortgage influences your financial future and your ability to free up your finances for things like early retirement. Working with a knowledgeable loan officer will help you purchase or refinance with the right loan to serve your goals.
When it comes to retiring early, how much you earn and save matters less than what you do with it. Cutting costs to deposit money in a low-interest savings account won’t yield the same results as shrewd investments or high-interest savings plans. Mortgage expenses can be one of the biggest obstacles to retirement. Buying or refinancing with a lender that can offer flexible loan products to reduce that burden is one of the best ways to make the most out of your housing investment.