Becoming Finncially Secure: Part 3

BECOMING FINANCIAL SECURE

Building Your Wealth: Part 3

We are starting out on a small level here when speaking about building your wealth.  I'm brining information to you in a way that if you are stressed about finances because you are not earning much, this gives you an avenue of thought to say "Wait a minute, I can manage that!".  This way, when you think of your finances, you think about the word management.  You are developing a mind set for managing your finances and ultimately increasing your finances.

Depending on your income level and expenses, you may have more flexibility in your savings goals.  There are many different ways to take advantage of saving funds from your income.

401(k)

A 401(k) plan is sponsored by your employer as a way to save money and invest for your retirement.  Most of the 401(k) are mutual funds which offer an array of investment options comprised of stocks, bonds and money market investments.  Funds are invested from your paycheck before taxes are taken out adn you don't pay any taxes until the money is withdrawn from the account.

The payments you make to the 401(k) vest immediately.  However, the employer contributions are not available immediately.  Usually, you have to work for the company between 3 and 5 years to be vested with the company.  That actual number depends on the company.  This is a very good way to maximize your retirement savings.


Savings Bonds

Savings bonds are a good idea for saving, however paper bonds are no longer sold.  You would need to purchase bonds online at TreasuryDirect.gov.  You will need to create a TreasuryDirect account with your Social Security number, bank account number and the bank routing number.

Savings bonds are a very good bet for saving in that your money doubles in a certain number of years. Currently EE Bonds mature in 20 years.  Bonds are now bought at face value so if you want a $50 bond, you pay $50 for it.  Interest can be earned on the bond up to 30 years.


Saving Disposable Funds

Now I want to move away from find a way to save money from your paycheck to saving money from your disposable income.  Some ways to do that are to:

Eat out less.
Shop at a discount store. Target, Marshall's and Burlington Coat Factory are excellent place to dress name brand at deeply discounted prices.
Buy fresh foods. Cooking them instead of buying prepackaged processed foods is healthier for you.

With that being said, I believe that packing your lunch for work is a major way to save money.  And if you must , then only buy lunch out once a week.  Packing your lunch allows you to choose any selection you wish.  It has health benefits over most of the fast foods you would choose to eat.  And that healthy eating gives you an advantage in making to retirement age to collect the funds you are saving.