As long as your child has earned income, he or she may contribute to an IRA – regardless of age. Let’s pause for a moment and think about this…Do you pay your minor children or grandchildren to work in your business? If so, these funds or a portion may be added to an IRA and used as a savings vehicle. Wow!!

There are two types of IRAs for children: traditional & Roth.

Traditional IRA – you pay taxes when you withdraw the funds at retirement. The contributions and interest accrued are pre-tax. Required minimum distributions begin at age 59 1/2.

Roth IRA – you pay taxes on the funds upfront. The contributions and interest are after-tax funds. No minimum required distributions.

Opening an IRA for your children and grandchildren is a great way to build wealth and save for retirement. Plus, you can teach your children how to save and show them the benefits.

Want to learn more? Schedule a consultation call.

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1. Set Life Goals
   What does financial freedom mean to you? Get specific about dollar amounts and dates. No matter the size of the goal or type (financial, lifestyle, etc.) design a blueprint to achieve these goals. The more specific you are, the more likely you are to achieve them. For example, I will save $200 per month for the next 12 months to pay for my trip to Paris in September 2023.
2. Create a Monthly Budget
   Detail your household expenses and financial goals. By doing so, you’ll create a routine and be less tempted to splurge. The key here is to adhere to the budget.
3. Pay Off Credit Card Balances
   Credit card debt and high-interest loans are toxic to wealth-building. Limit your debt and monitor your credit score.
4. Use Automatic Savings
   Be sure to pay yourself first. Sign up for automatic savings plans to create an emergency fund. Enroll in your employer’s retirement plan as this has tax advantages, includes company matching, and is a great way to save for retirement.
5. Begin Investing
   Take advantage of systematic investing and make weekly or monthly contributions to an online brokerage account. Let’s just say, compound interest works wonders – especially over time.
6. Monitor Your Credit Score
   Your credit score is crucial as it determines your interest rate when borrowing money. Also, it impacts your life insurance premiums, car insurance rates, and in some cases your employment prospects. Therefore, be sure to pull your credit report periodically and invest in a reputable credit monitoring service.
7. Take care of your material belongings
   Adhere to your vehicle maintenance schedules, as well as your major appliances, and home systems. It costs far less to maintain your possessions than it does to replace them.
8. Maintain Your Well Being
   Invest in your physical and mental health as you do your finances. Create an active lifestyle and manage stress effectively. Attend your scheduled doctor visits and address your concerns with your physicians. With the stress of balancing life and work, seek out a mental health therapist to help you be your best self. Remember, prevention is better than cure.
9. Hire a Financial Advisor
   When you’ve accumulated a decent amount of wealth, find a financial advisor who aligns with your financial goals. Different advisors require varying minimums in liquid and or non-liquid assets.
10. Live Below Your Means
    As with your budget, take the time to distinguish between your wants and needs. What things are a necessity as opposed to a luxury? Do you really need to purchase coffee from your favorite coffee shop 5 days a week or is it more economical to make your coffee at home? Making minor adjustments can go a long way to helping you achieve your goals.

Let’s Talk! Contact us today and let’s discuss ways we can help you become financially independent. 

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The post Financial Freedom: 10 Habits to Practice appeared first on T-Accounting & Tax Services LLC.