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1. Stay away from high-interest debt

Carrying balances on your credit card costs you more than you might realize. The average credit card interest rate is now over 23% — the highest since LendingTree started tracking them monthly in 2019.

To put that in perspective, imagine you have a balance of $10,000 at a slightly lower interest rate of 21%. Given payments of $200 a month, it would take you 10 years to pay off the balance and cost you an extra $13,972 in interest charges over and above the $10,000.

Think twice before you buy expensive items on a credit card. If you need to make a big-ticket charge, plan ahead to pay it off within a month or two in full.

Then you can dump the money you saved into a high-powered retirement account or whatever else you like. Anything beats losing large amounts of money to interest payments.

Kiss Your Credit Card Debt Goodbye

Having a single loan to pay off makes it easier to manage your payments, and you can often get a better interest rate than what you might be paying on credit cards and car loans.

Fiona is an online marketplace offering personalized loan options based on your unique financial situation.

When you consolidate your debt with a personal loan, you can roll your payments into one monthly installment. Find a lower interest rate and pay down your debt faster today.

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2. Maximize your 401(k) or IRA contributions

It’s not easy to think about the future when you’re struggling today. According to U.S. Census Bureau data, 50% of women and 47% of men between the ages of 55 and 66 have no retirement savings.

But putting your future first need not be painful and will reap huge benefits – even if you can only put away small sums of money over time.

Work-sponsored 401(k) accounts or independent IRAs are the common gateways to retirement savings. The closer you can get to the maximum yearly contributions – $22,500, or $30,000 if you’re 50 or older for 401(k)s, $6,500 for IRAs – the closer you’ll get to retiring with a secure cushion.

Sadly, saving for retirement gets relegated to the back burner for many of us, especially as the cost of living and inflation put more demands on our incomes.

What’s more, nearly 57 million Americans reportedly work for an employer that does not offer a retirement savings plan, according to the AARP.

Tweak your budget so you can find ways to make retirement contributions, even if you can’t max them out.

Read more: This millionaire YouTube star says making $200K should be easy 'if you are smart about it' — 3 simple ways to actually boost your income

3. Create a budget

A budget is your lifeline to financial freedom because it takes spending from vagueness to clarity.

No matter which method you use, you’ll use the same starting point: List how much money comes in and how often you get paid. Then you’ll tabulate every expense, including the dollar amount and payment due date.

Since every budgeting method differs, your next steps can vary. Some popular methods include:

  • The 50/20/30 method
  • The zero-based budget
  • The envelope or cash-stuffing method
  • The reverse budget
  • The “pay yourself first” method

It can help to remember you don’t have to stick with the first one you try. Sample different methods to see which works best for you.

Stop overpaying for home insurance

Home insurance is an essential expense – one that can often be pricey. You can lower your monthly recurring expenses by finding a more economical alternative for home insurance.

SmartFinancial can help you do just that. SmartFinancial’s online marketplace of vetted home insurance providers allows you to quickly shop around for rates from the country’s top insurance companies, and ensure you’re paying the lowest price possible for your home insurance.

Explore better rates

4. Negotiate your salary

Most people don’t negotiate a salary. A 2023 ZipRecruiter survey found nearly two-thirds of job-seekers accept the salary offered to them and don’t make a counter-offer or negotiate.

But employers expect you to negotiate. CNBC reported that 85% of people who negotiated a salary offer were successful in those counteroffers.

While a budget is a vital component of smart spending, earning more allows you more leeway to pay off debt and save for your future.

5. Take advantage of all your employee benefits

Whether you’re scouting for a new job or like where you’re at, explore all the benefits your job (or potential job) offers.

What does your health insurance cover? Is it just for you or your dependents as well?

You should also look at options for life insurance, 401(k) matches, continuing education stipends, student loan debt matches, and more.

If your company matches retirement account contributions, it's a golden opportunity to land “free money" from your employer.

Follow These Steps if you Want to Retire Early

Secure your financial future with a tailored plan to maximize investments, navigate taxes, and retire comfortably.

Zoe Financial is an online platform that can match you with a network of vetted fiduciary advisors who are evaluated based on their credentials, education, experience, and pricing. The best part? - there is no fee to find an advisor.

About the Author

Dori Zinn

Dori Zinn

Freelance Contributor

Dori Zinn is a freelance contributor to Moneywise.

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The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.