Financial freedom means something different for everyone. Whether you make $50,000 or $500,000 a year, financial freedom is about feeling free to spend money on things that matter to you without worrying about how you'll afford it.
These are challenging economic times. For some, financial freedom seems impossible when it's tough to just pay for the essentials. For others, it's about being free of debt and saving enough to cover emergencies. Still others are looking towards retirement and want to be free to live life on their terms.
That kind of freedom doesn't happen overnight. It all starts with understanding where you're at today and taking smart, purposeful steps towards your personal vision of financial freedom. So, where are you at today? Choose below and just keep putting one foot in front of the other.
I need to be able to pay for the essentials
Currently, Nevada's unemployment rate is one of the highest in the nation. If you're not working, it can be tough to pay for the essentials yet alone other bills. To move forward, our best advice is to prioritize your expenses and pay what you can. Food and housing expenses should always come first. Next, if you've got a car payment, make that. After that, pay utilities, credit card debt, and then any other debt, in that order.
Typically, we'd rank utilities above car payments, but in the wake of COVID-19, many Nevada utilities have temporarily suspended service disruptions due to non-payment. As such, we recommend you keep making that car payment so you've got reliable transportation.
In all cases, if you can't make your payments timely, it's best to contact those you owe BEFORE your bill is past due, be honest about your situation, and ask them to work with you. And don't be ashamed to seek aid wherever you can get it. It can help you move forward faster. Once you're able to cover the essentials, it's time to set a new vision.
I want to reduce my debt and build a cushion
Got the essentials covered, but you're carrying around too much debt? The next steps in your financial freedom journey are to get rid of bad debt and build a savings cushion. Building emergency savings helps you avoid taking a step backwards when the unexpected occurs.
We recommend starting with our four-step debt recovery plan. This plan can help you to establish a budget, evaluate your relationship with money, prioritize your debt payments, and build an emergency cushion.
I want to retire comfortably
Once you can comfortably cover the essentials, have your debt under control, and have built your emergency savings, it's the perfect time to focus on your retirement plan.
If you've got an employer sponsored retirement plan available through work, take full advantage of it. It can provide tax advantages, and most companies will match your contributions up to a certain amount. It's like getting free money.
At a minimum, we recommend you contribute the amount required to take full advantage of your company match. Contribute more if you can. Most financial models say that saving 15% to 20% of your monthly income is ideal.
There are many other long-term savings and investments options available, but determining what's best for your particular situation can be confusing. That's where our CFS* Financial Advisors at One Nevada Investment Services can help. They'll listen to you, understand your long-term goals, and help you develop a strategy to achieve them. Schedule your no-cost, no obligation consultation today.
*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk, including possible loss of principal.
One Nevada Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members. CFS Representatives do not provide tax or legal guidance. For such guidance, please consult with a qualified professional.