Personal Savings Plan: How Millennials can achieve Financial Freedom

Who would not want financial independence in life. This is an impulse for so many who make a lot of money. Financial independence means that you have sufficient savings, investments, deposits, and cash to afford a lifestyle that we always crave for. Financial freedom means having enough savings, investments, and cash on hand to afford the lifestyle we want for ourselves and our families and a growing nest egg that will allow us to retire or pursue the career we want without being driven by earning a certain amount each year. Too many of us fail to reach that goal. We are burdened with increasing debt, financial emergencies, profligate spending, and other issues that thwart us from reaching our goals. It happens to everyone, but these twelve habits can put you on the right path.

1. Set Life Goals
   

   A general desire for “financial freedom” is too vague of a goal. What does it mean to you? Write down how much you should have in your bank account, what the lifestyle entails and at what age this should be achieved. The more specific your goals, the higher the likelihood of achieving them. Then, count backward to your current age and establish financial mileposts at regular intervals. Write it all down neatly and put the goal sheet at the very beginning of your financial binder.

2. Make a Budget
   

   Making a monthly household budget, and sticking to it, is the best way to guarantee all bills are paid and savings are on track. It is also a monthly routine that reinforces your goals and bolsters resolve against the temptation to splurge.
   
   

   

3. Pay off Credit Cards in Full
   

   Credit cards and similar high-interest consumer loans are toxic to wealth-building. Make it a point to pay off the full balance each month. Student loans, mortgages and similar loans typically have much lower interest rates, making them less of an emergency to pay off.

4. Create Automatic Savings
   

   Pay yourself first. Enroll in your employer’s retirement plan and make full use of any matching contribution benefit. It is also wise to have an automatic withdrawal for an emergency fund that can be tapped for unexpected expenses and an automatic contribution to a brokerage account or similar account. Ideally, the money should be pulled the same day you receive your paycheck, so it never even touches your hands, avoiding temptation entirely. However, keep in mind that the recommended amount to save is highly debated; and in some cases, the feasibility of such a fund is also in question.

5. Start Investing Now
   

   There is no better or tried and true way to grow your money than through investing. The magic of compound interest will help your money grow exponentially over time, but you need a lot of time to achieve meaningful growth. Do not try to be a stock picker or trick yourself into thinking you can. There can be only one. Open an online brokerage account that makes it easy for you to learn how to invest, create a manageable portfolio, and make weekly or monthly contributions to it automatically. We have ranked the Best Online Brokers for Beginners to help you get started. Plan your investment strategies today–in both short- and long-term financial goals, for safe, secure, and timely returns.