Do You Worry About Money?

Are you anxious about your financial future? Will you have enough money to retire? After you die, will your family be able to cover expenses? Living in fear that money will never be enough can leave you feeling inadequate and longing for more. However, acknowledging your current financial shortfall and taking action now can improve not only your relationship with money, but also how it impacts your life.

Financial Wellness

Being a good manager of money provides peace of mind and enables you to live within your means. Establishing a budget can make saving money easier. Knowing exactly how much money to attribute to savings and expenses monthly allows you to build up savings over the long term and can prevent you from overspending. Unforeseen events are inevitable. An emergency fund that can cover three to six months of expenses can provide protection from life’s financial surprises. Setting aside money regularly can help you build an emergency fund and also help you find long-term financial security. Insurance coverage is another means of protecting you and your household from financial loss. Lack of health, home, and car insurance protection can result in high out-of-pocket expenses. What’s more, living without adequate insurance coverage can force you into deep debt or even bankruptcy. As such, educate yourself about personal finance by learning to budget, save money, and use insurance to protect your assets.

Planning for Income in Retirement

Despite the misconceptions, Social Security will not be enough to live comfortably in retirement. Retirees should expect that Social Security benefits will only replace about 40% of pre-retirement income. If you plan to retire on Social Security alone, it is unlikely that you will be able to maintain the lifestyle you enjoyed in your working years, you may be forced to downsize your home, and you may need to rely on others financially.

In addition to the Social Security benefits you may be entitled to receive, investing in a retirement plan can provide income when you are no longer able to work. Contributions in small amounts over time can reduce current taxable income. Additionally, contributions are not taxed until money is distributed later in life and, because interest accrues over time, contributions can grow substantially by the time you retire.

Financial Freedom

Focusing on the important things in life, including practicing money-saving habits, will serve you well into retirement. In the income-earning years, expenses need not go up as your income goes up. In other words, a bigger salary does not have to lead to a bigger house or more expensive cars. Rather, cutting unnecessary expenses, reducing your debt, and saving money for retirement can lead to better control over your finances and help you achieve financial freedom. With financial freedom, you can break free from money worries. And, having a secure financial foundation can help you pursue your dreams and allow you to spend your time doing what brings you joy.