In fact, the American economy is presently a Goldilocks Economy, meaning, there’s not too much (less than 2%) inflation and has an ideal growth rate of 2-3%. The Gross Domestic Product, or GDP is up, and the core inflation rate is down.
This is great. Right? So why is it that two-thirds of Americans would struggle to put together $1,000 in an emergency? According to the Center for Public Affairs Research of the Associated Press, even among the highest earning 20% of the country, earning $100,000 or more, 38% say they would have some difficulty coming up with $1000 dollars. The same poll indicates that 54% of working Americans say they are not very or not confident at all that they will have enough money to retire when they want to.
You Can Beat Those Numbers
The economy is doing well, which means there is money out there for you. We’ve spoken to 15 experts in financial planning and budgeting to hear what they say about spending, saving and earning more money, so you can be part of the successful 46% who can retire on time, with enough money in the bank to pay for whatever unexpected expenses come your way. We’ve found financial bloggers, influencers and regular ol’ people who have made it to the top and have advice to share, and have their tips here for you.
Experts unanimously agree you should focus on:
- Financial outlook and attitude
- Cutting back and saving where you can
- Earning more, generating passive income, and investing
Once you’ve played those cards, get ready to take a snooze in the bed that you’ve made for yourself, that’s ‘just right’ for you.
1. Work on Your Financial Attitude
According to Amy Blacklock of womenwhomoney.com, “A key aspect of achieving financial freedom is tackling the emotional side of the pursuit. It will likely be an ongoing process as you work to change your money mindset, spending behaviors and saving habits. You may even have to check your ego.”
Amy elaborates in her blog that your mindset determines how wealthy you truly are, and you’ll be able to save more and grow your assets faster if you’re happy with what you have. Having an abundance mindset keeps you from torturing yourself, buying things you don’t need and trying to keep up with others.
Janet, from mytwentycents.com wholeheartedly agrees. “The best way to achieve financial freedom is to practice gratitude. Being grateful for what I have and not wanting to accumulate more ‘stuff’ has been my secret to achieving financial independence at a very young age.”
Part of having a successful financial attitude is independently setting your own goals. Know why you’re spending, and have a plan for your money that you’ve chosen.
Wendy Valencia, of the organizational advice YouTube channel with her name, says “There are so many programs and gurus out there to teach you the ‘best’ way to financial freedom, but the actual path to financial freedom that you choose is far less important than just getting started and sticking to your plan when things get difficult. In reality, success with money is 100% about just making small steps daily that will head you in the direction of your goal.”
Brian Meiggs, founder of My Millennial Guide, concurs: “Financial freedom looks different for many people.”
No need to be intimidated by fancy plans or big goals. Move forward, stay positive, don’t compare yourself to anyone else, and you’ll see your efforts pay off. Once money is just a path to your goals, you can remove the anxiety, expectations, other people’s goals, and get down to business. As Daniella, from I Like to Dabble, says, “Achieving financial freedom isn't necessarily hard. But it is a long game. Plant the seeds now so they can grow later.” It’s time to start planting.
2. Take Control of Your Spending
Yes, you really can.
Sarah Titus did. She says, “I totally get it. Several years ago, I was living in a homeless shelter and had $30K+ worth of debt! Today, I'm completely debt free!!” After being married for 14 years, Sarah’s then-husband walked away, leaving her alone with two young kids. Today, she runs a multi-million dollar online empire with a blog, printables, and online shop, courses, and more. Sarah’s advice? “The biggest change I made was to stop buying stuff. I'd buy something just because I wanted to look at it later on or because I felt guilty walking out of the store empty handed. So I started taking pictures instead. Keeping the pictures on Pinterest rather than in my home means I keep more money in my pocketbook and have less clutter. I stopped going to stores so much and have my groceries delivered now to avoid temptation. When I go to the store, I make sure to really think about if I'll USE that item long-term. Thinking through each item I purchase really helps!”
My Debt Epiphany’s Chonce Maddox is right there with her, “My best tip for reaching financial independence is simple but challenging for most people - live well on less than you make. If you do this, you will always have extra money to pay off your debt, save and invest in other wealth building strategies. Today our society is driven by instant gratification and going after bigger and better things. But challenge yourself to buy the smaller home, drive the older car, stick with the cell phone from last season. Prioritize what you truly value and live your best life.”
Jon Dulin recommends that in order to do what Maddox suggests you should, “Pay yourself first. Stop trying to save what is left over at the end of the month and instead save money when you get paid.” His website, Compounding Pennies, is designed to help teach personal finance tips and tricks so you can change your finances fomir the better as fast as possible. He recommends not only shopping less, like Sarah does, but also setting aside at least $5 per month at the beginning of the money, before it walks away on “necessary expenses.” He says “There is no excuse as to why you can’t save this amount. Just make it a habit.”
There are plenty of tools out there to help you set keep track and set that money aside.
Eric Rosenberg, who runs the website Personal Profitability, advises: “The best thing you can do to improve your money is pay attention. Sign up for a money management and budgeting app like Mint, YNAB, or Personal Capital. Using helpful budgeting tools, you can automatically track your spending compared to a budget you choose.”
Sara, from GatheringDreams says, “You’ll be surprised how little we know about where we spend our money. We invest so much of our energy earning money but we never take enough time to manage it.”
Levi Sanchez, of Millennial Wealth, sums it up, “What's coming in each month versus what's going out? How much are you earning on average versus spending on average every month. Once you have an idea of what those figures look like you can determine how to best use any excess cash flow towards various financial goals.”
Once you’ve gotten track of your spending, cut back and know what kind of cash flow you’ve got coming in and out, it’s time to move to the next step.
3. Make More Money
“The best way to achieve financial freedom is by taking advantage of compound interest. Compound interest gives the everyday person a fighting chance at accumulating a vast sum of money,” says R. J. Weiss of The Ways to Wealth, “What's important to understand about compound interest is it's either going to work for you through investing or against you through the compounding of debt. This is why it's important one gets out of high-interest debt as quick as possible and become an investor to achieve financial freedom.”
Investments are often referred to as “passive income” because of their ability to generate compound interest without your personal time and physical attention. Unlike your day-job, a passive ‘side hustle’ can be the key to paying off debt, saving money, and freeing up your time for the things you love.
Jennifer Kempson, from the Mama FurFur guide to financial success, completely agrees and sees the fruit of this method herself, “I am achieving financial security and freedom for my family by dedicating a portion of our money every month to investments creating a passive income stream in terms of dividends/returns for long term future growth and creating multiple passive income streams of income with my side business ideas such as Ebooks/Blog/Youtube channel/Digital courses and products. Creating incomes where you do not give up your time in exchange for money is key, and that is why investing plus business ideas is the winning combination!”
You may think you can’t possibly have time to earn extra money, but Making Sense of Cents’ Michelle is encouraging, “For me, I was able to pay off $40,000 in student loan debt in just 7 months by taking on multiple side jobs. And before you think that you have no time - there are probably areas in your life where you are wasting time. For example, the average person watches over 30 hours of TV a week - that could be used to find ways to make extra money!”
Earning as much as you can on the side combined with generating interest on investments is the winning one-two punch that can get your head above water, your debts paid off, and your retirement years secure.
Your Money is Waiting
The economy is doing well, and it’s time for your slice of the pie. Keep social expectations and pressures out of the equations and learn where to draw the red lines in your spending. Money doesn’t have to make you anxious; rather it can pay off your debts, assure your future and accrue on the side with limited involvement from you. Follow these experts to continue learning more from them, and consider the tips they’ve shared so you can enjoy your money too.