For many Americans, thinking about money is stressful. More than two-thirds of all Americans say that they’re stressed about their financial situation, and it’s not hard to see why. Among other financial issues, huge portions of the public are not saving enough money to retire on.
Then again, to say that most Americans are not saving enough for retirement is to ignore another critical part of the equation. It’s not just about how much money you make and how much of that you put away; it’s also about what you do with that money once you’ve saved it. The ways in which you use and spend your hard-earned cash have everything to do with how well you’ll retire and how comfortably you’ll live. Here’s how to do more with your money.
Look for ways to keep taxes down
You work hard for your money, but you don’t get to keep all of it. Like it or not, Uncle Sam will come around for his share, and you’ll have to cough it up. With that said, though, how much money you pay in taxes is not set in stone.
You could limit your tax burden with smart accounting practices. You could also invest your cash in tax-advantaged accounts such as 401(k)s and IRAs. Contributing as much as you can to tax-advantaged investment accounts is the best way to save for retirement.
Spend smart on big purchases
You save your money for retirement, but that’s not all you save for. Americans like you save up for all kinds of reasons: to buy a home, take a vacation, and more.
When the time comes to spend the money that you’ve worked hard to earn, be smart. Big purchases offer you big chances to save. After working hard and saving up for a big purchase, too many people fail to shop around and maximize their savings. Just because you’ve saved up a certain amount doesn’t mean that you have to spend all of it. Besides, you could get more for that amount of money if you shop carefully. When it comes to large purchases like homes and vehicles, turn to experts you can trust and do lots of research before you buy, recommend the experts at a respected car dealership in Enfield, CT.
Saving money isn’t enough to build meaningful wealth. If you’re going to grow your net worth effectively and save for a comfortable retirement, then you need to invest your money and get interest from it. That way, the power of compound interest over time will grow your savings to the point where they can actually support your retirement dreams.
It’s not enough to just invest, though; you need to invest wisely. The trading strategies that you use can make or break your financial future. A poor strategy could give you meager returns or, worse yet, trigger terrible losses.
Don’t get too risky with your retirement funds; your best bet is to save early, save often, and aim for steady and reliable investments that will give you great growth over the long term. Still, you may want to get more aggressive with funds that you are better able to to afford to lose. With the right strategy and the guts that it takes to be aggressive on the market, you may find that you can beat the market and build your wealth even faster. Just remember to take some of those earnings and move them to the safe, reliable investments in your retirement fund, hotshot.
Spend on yourself sometimes
Money can help you make more money, but it’s worth remembering that money is only worth what it can buy for you. While you need to be frugal and responsible, it’s OK to spend a little cash on yourself sometimes.
Once you’re comfortable with your budget and your retirement strategy, and once you have your emergency fund and any other savings you need, don’t be afraid to spend some of what you earn. Spending on yourself (and particularly on experiences rather than on things) will help you enjoy your life the way you were meant to.