7 Little Changes That'll Make a Big Difference With Your evoestate

While the sky was falling during the recession, many people who thought they had a "safe and secure" job learned that the world economy has changed. The days of finding a secure job for life is pretty much over and the next 20 years is bound to be a tumultuous economic time. While relying on a salary is a safe and secure idea, I can think of no worse place to be in this changing economy. Depending on someone else to look after you financially is a recipe for disaster.


Financial independence basically means that you are not dependent on someone else for your income. It means you don't put the responsibility of your income on someone else. the way to become financially independent is to learn how to generate your own income. As long as you rely on someone else to provide for you, you will always be at their mercy. You will always rely on them for your income and as we saw during the recession, its never a sure bet.

Financial independence is often associated with being rich and making a lot of money, but for me its much more significant than that. Its about freedom, being independent and above all having the control over your own financial situation.

So, the idea certainly sounds great but how do you get there? Well, there are 2 important concepts that can get you there. The first is the fact that you have to start your own business. Regardless of how small or how large because a business will give you leverage to earn money even when you sleep. You have to get away from the idea of exchanging your time for money (as you do with a regular day job).


The second concept is that of investing for wealth. Investing can be very powerful and even if you invest a small amount every month you have to start sooner rather than later. Investing allows your money to work hard for you instead of you working hard for it. It allows you to grow your wealth without having to work for it. Compound interest is an incredible concept and by building interest on your interest you can really snowball your financial success and create financial independence for yourself and your family.

The secret to obtaining financial independence is to get started. If you are stuck in a day job (especially one you hate) then you have to start doing something - even if its just reading a book or taking night classes. Take the first step and the rest will take care of itself.

New college graduates are on the loose and out building their new work wardrobes for their first job. Are you a proud parent and grandparent? In addition to celebrating with them over parties and gifts, now is the time to give them the gift of financial independence too. As they start their first jobs, you might ask yourself, "Is my child prepared for the financial responsibility that comes with a full-time job and living on their own?" Right from the start, you want them to develop savings priorities and healthy spending habits. Here are some tips to help you point them in the right direction:

Explain the importance of saving

As young adults start receiving a paycheck, they may find it tempting to spend their funds a lot more on "wants" rather than "needs." You can help by reminding them of the difference between the two and sharing the importance of saving. Whether it's saving for unexpected expenses and emergencies or to eventually buy a car or home, encourage your young adult to put a set amount aside from every paycheck. You may also tell them to check with their employer and see if they can direct the savings portion of their paycheck directly into a savings account with only the remainder going to their checking account for spending.

Emphasize retirement contributions

New graduates hardly think about retirement. They've just entered the workforce - why would they need to think about an event that will impact them 40+ years from now? With rent, bills and other responsibilities, your young adult may choose not to contribute to their retirement right out of school. We all know that this is a mistake! This is your chance to emphasize how a long retirement time horizon can benefit them financially. Educate them about compounding growth in savings and encourage them to speak to their employer about any professional guidance offered. Emphasize to them that they have one of the greatest assets working for them at this age: time.


Teach them to follow a budget

Budgeting allows young adults to create a spending plan with their money. It's a great way for them to track their expenses and see if they have enough to spend on the things they really enjoy. Budgeting can keep your young adult focused on their money goals and avoid any unnecessary financial hassle. If they become overwhelmed, share how you learned to live within your paycheck and show them that there are apps and online tools today that they can use - here are just a few examples.

Show them how to pay bills on time

As an independent adult, your child will need to take on lots of responsibility quickly. Perhaps this includes regularly paying a variety of bills (rent, cell phone, etc.). Keeping track of when bills are due can become cumbersome for those just starting out. Show your child that it's crucial to stay on top of bills and pay them on time. Late payments and fees - and any outstanding interest on balances - will deplete their disposable income, leaving them less money to spend on entertainment and fun. Many apps and computer programs exist to help set reminders and automatic payments. Help your young adult look at the options and share any systems you use to manage monthly payments.

Help them build credit


Many college grads have not yet had a chance to establish a credit history. Educate them about how a credit score can impact their future. A good credit score can influence their ability to get car loans and mortgages approved. Their credit score can also impact the interest rates on these loans: A good credit score may lead to lower interest rates. Some employers use a credit check in their hiring process. Some insurance companies also use credit scores as part of their underwriting process as a person's reinvest24 credit can be a predictor of insurance claims. To help your young adult build their credit score, encourage them to pay bills on time, avoid acquiring too much debt on any open credit cards, limit the number of credit cards used, and keep their oldest credit card open.

Now that your graduate is officially launched, use some of your time together to pass on good financial habits. Whether it's dedicating a portion of every paycheck to savings or using an app to track spending, these tips may help your young adult to stay on top of their finances and develop good money habits that can last a lifetime.