Though every financially responsible adult has the knowledge that they need to budget and save, many don’t know there are some financial strategies to add to their financial plans. These plans could make a huge difference in financial freedom, the ability to make large purchases like buying a home, and having an amazing retirement instead of one full of financial struggles like so many who count on social security.
Whether you have a financial planner or don’t have a penny saved, there are financial strategies you can start implementing today that will give you the boost you need in your savings and on your path to financial freedom. Here are five easy financial strategies that work!
Vehicle Purchase Strategy
While a vehicle can say a lot about us, the truth is that if you are looking for financial freedom, your vehicle purchase can make a significant difference in obtaining it or not if you are anyone other than a person who can own a car to match any outfit. Realistically, your vehicle purchase should be well within your means, as doing anything outside of that can be disastrous on your financial health and credit.
Never buy payments. You need to know the price they are charging you, final and total. A common sales strategy of recent years is to find out what payment amount you can afford and sell you a car with those payments over a period that, when added up, will, in some cases, be up to three times the value of the car. Also, know the interest rate you are being charged.
Pay as large of a down payment as you can handle. If you are in a dire situation that you need to purchase the car immediately, then it is understandable that you don’t have a large down payment at the ready. However, if you have time, take that time to save to pay as much down as possible.
Do your research on the vehicle you intend to purchase and know the value. Figure the basic payments, know your credit, run your own numbers, and be armed with them before you ever walk onto the lot.
Insurance Strategy
Insurance is an unfortunate necessity in every person’s life, and in some cases having insurance is the law. However, just because it is a must does not mean you have to accept what you get. It would be best if you exhausted every money-saving strategy at your disposal.
Shop, shop, and then shop some more. With healthcare, vehicle, homeowners, and other insurances that you may need, there is a lot of competition. Therefore if you are a savvy buyer, you can save hundreds a year in insurance. And don’t use those sites that say they will impartially compare. You do the research. You do the comparisons. This strategy will save you so much money.
Also, take healthy preventative precautions or driver’s education classes to lower your health and car insurance rates. Insurance doesn’t have to break your bank to be good and affordable.
10/10/80 Strategy
There are a few percentage financial strategies out there, but the 10/10/80 is among the most popular and easy to apply. This strategy says to give 10%, save 10%, and spend 80% of your income. This strategy is excellent and simple, but at some point, you will need to readjust those percentages if you want to make a more significant impact on your financial future.
50/30/20 Strategy
50/30/20 is another money allocation type of strategy with a similar formula to 10/10/80. The significant difference is that this strategy has savings built-in, but only after debt is paid. This strategy wants you to be at zero when it comes to debt before even thinking about saving. It breaks down as follows 50% goes to bills and necessities. There is no exception to this allocation. 30% towards paying down debt, and once your debt is zero. This percentage would go to savings. 20% goes to wants. This would be anything you pay for outside of bills and necessities or debt relief and savings. This is the lowest percentage on purpose. It would be best if you never were spending on wants and missing bills or leaving debt hanging over your head.
Down Payment Strategy
The down payment strategy was already touched on a bit when discussing vehicle purchases. It doesn’t take a mathematician to understand that your payments and interest rates will be lower if you put more money down on large purchases. It is suggested that you put down at least a 20% down payment, which is a great suggestion. When implementing the down payment strategy, the most important thing is that you put something down. This strategy can pay off big in the end.
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