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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 24.56% as of Nov. 17, according to LendingTree — the highest figure on record since the online lending marketplace started tracking rates 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 retirement account or whatever else you like. Anything beats losing large amounts of money to interest payments.

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2. Maximize your 401(k) or IRA contributions

Putting your future first doesn’t have to be painful and can 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 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.

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.

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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. Around 85% of people who countered on a salary, benefits or both received at least some of what they wanted, according to a survey by Fidelity Investments.

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.

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Dori Zinn Freelance Contributor

Dori Zinn is a freelance contributor to Moneywise.


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.