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4 Tips to Jumpstart Retirement Planning

Retirement. It seems like a lifetime away, right? Probably something you plan to worry about when you’re a little closer to your retirement date. However, financial experts suggest that the best time to start planning is in your 20s when you typically start earning a steady paycheck.

To put it into perspective, if you start saving at 25 and put away $3,000 a year for 10 years, by the time you reach 65, your $30,000 investment could grow to more than $338,000.* Regardless of your retirement date, it’s never too early to start planning for your retirement. You may be asking, “Where is the best place to start?” and “How should I invest my money to maximize the returns I see at retirement?” Both of these are great questions that we will delve into on this post.

Set your goals

This applies to 20-somethings, 30-somethings, and 40-somethings. How do you know what steps to take if you don’t know where you’re going?

Sit down and figure out your goals. Do you want to buy a house one day? How long do you need to rent and save money? What “bad debt” do you need to pay off now to help you in the long run? These answers may change as life circumstances change, but it’s helpful to know what your goals are and create a plan to achieve them before you set out on your savings adventure.

Take advantage of your employee benefits

Does your company offer a retirement savings account? Most full-time jobs will offer either a 401(k) or a SIMPLE IRA (Savings Incentive Match Plan for Employees Individual Retirement Account). It’s important to understand what these accounts are, how they work, and whether or not it’s a viable option for you. What’s the difference in a 401(k) and a SIMPLE IRA?

A 401(k) is an investment account you make contributions to out of each paycheck. If your employer matches your contribution up to a certain percentage, that’s free money going into your 401(k) in addition to the contributions you’re making.

A SIMPLE IRA is a tax-deferred employer-provided retirement plan. Like a 401(k), you make pre-tax contributions from your paycheck, and your employer can also elect to match your contributions up to a certain percentage. Unlike a ROTH IRA, when you reach retirement age and begin drawing from the SIMPLE IRA, you will pay taxes on the money you’ve saved.

Good debt vs. bad debt

Believe it or not, there is such a thing as good debt. Debt to buy a home or to start a business is considered good debt as it can be used as collateral. To our 20-somethings, listen up! Consumer debt – credit cards, car loans, and student loans – are always bad. Most consumer debt comes with high-interest rates, which only hurt you as you get older.

No matter what age you are, the best thing you can do is to avoid buying things you can’t afford. But, if you have debt or need to go into debt for a major purchase, have a plan to get out of that debt promptly. Look for places in your monthly budget where you can reduce spending and cut unnecessary costs.

Check out debt consolidation and refinancing options

Consolidating debt and refinancing loans are two great ways to save money on your monthly payments. Debt consolidation is typically used for unsecured debt and is especially effective for high-interest debt like credit cards, while refinancing a loan enables borrowers to “redo” an existing loan to get a lower monthly payment, different term length or a more convenient payment structure.

Both options are a great way of saving money each month. Ideally, you’d be able to measure the savings you’re seeing and put that toward your retirement planning. It might not sound like a lot of money, but even if you were able to save $50 a month, at the end of a year you’d have $600 to put toward your retirement.

Do you have debt that can be consolidated? Do you have loans that can be refinanced? You never know what your options are until you ask. Check with someone at our branch to see if we can save you some money each month to put toward your retirement.

Truth is, there are a dozen different ways you can prepare for retirement early and start saving money. At Scient FCU, we offer our members a complimentary financial review – no strings attached.  Schedule your 30-minute consultation with our financial advisor now.  Visit Scient Financial Services, call 860 441 9090 or email delster@cusonet.com and start preparing for your future.

Tips for Managing Your Holiday Spending

Like almost everything else these days, the holidays have become a barrage of options and choices, with nearly limitless opportunities to overspend. Here are some tips to help you make sure your family’s spending remains in check this holiday season.

Develop a spending strategy

First and foremost, develop a budget. Involving family members will help you establish and maintain realistic expectations at the outset. Remember to include not just gifts, but also holiday meals and parties, travel, greeting cards and stamps, gift wrap, decorations, and any other category you deem necessary. This is also a good time to commit to using cash or charging no more than you can pay off in one month.

Next, devise a method of tracking all your purchases, receipts, gift recipients, and the locations of hidden gifts that you might otherwise forget about. This will make life easier as the chaos ramps up.

Review your credit cards to see if you have any perks. Could you use earned points for travel, or cash-back and gift card rewards to help defray costs?

Track down old gift cards and put them to use now. If you think you’ll never use them, trade them in for cash on a discounted gift card website. There, you can sell your old cards and even buy new e-gift cards at a discounted rate, which you can then give as gifts or use for your own purchases.

Put technology to work for you. You can find apps that offer cash back if you shop online; alert you to online coupons available at nearby stores; round up your purchases to the nearest dollar and put the difference into a savings account; and track your online purchases, scan other stores for better prices, and then automatically email the original stores on your behalf to take advantage of the price-match guarantees. There are myriad options available, so be sure to check reviews and privacy/security measures before downloading.

Think creatively

Gifts. Take time to carefully scan all promotional materials before you head out the door or open a browser, because great deals are often available for limited periods of time. For example, some stores have offered generous gift cards in exchange for buying certain products on Black Friday.

Consider giving experiences rather than gifts, which happiness experts say could lead to more sustained levels of well-being. In fact, you may find that you’ll spend less overall by giving one or two memorable experiences instead of the usual pile of items.

Create meaningful yet inexpensive gifts, such as photo books, calendars, and family recipe books, using online apps and services. This idea is especially appropriate for gifts from children to older family members.

For larger or extended families, make a game out of gift giving. Consider a “Yankee swap,” or implement a gift exchange, where everyone is randomly assigned a person for whom they buy one special gift. Or consider having the entire family chip in a certain amount per person and donating to a favorite charity or sponsoring another family in need.

Food. Nonperishable holiday-related goods typically go on sale in late fall, so plan ahead and stock up. Also keep an eye out for specials; for example, some grocery stores offer a free turkey around Thanksgiving when you spend a certain amount on groceries.

Party planning, decorations, gift wrap. Consider buying the bulk of these supplies at deep-discount stores and splurging on a few special highlight items, such as napkins with an elaborate design, centerpieces of fresh flowers, or fancy bows. If you live in an area where evergreens, autumn berries, and pine cones are plentiful, take advantage of this potentially sophisticated, yet completely free, decor. Or create even more memories by hosting an ornament-making party. Use old costume jewelry or other items to make ornaments and decorations with sentimental value.

Travel. During one of the busiest travel times of the year, deals can be hard to find. Here are some tips:

  • Be flexible. If you can postpone your celebration until after the holidays, you may be able to save substantially on travel costs. (You can also shop the post-holiday sales for gifts!)
  • Avoid airline baggage fees by using carry-on luggage.
  • Use fare-tracking apps to find the best deals.
  • Cost-compare alternative modes of travel, such as train and ridesharing.

It’s never too early to start saving

Finally, get a jump on next year’s festivities by stocking up on supplies during post-holiday sales, opening a savings account with a goal of saving at least as much as you spend this year, and shopping as early as possible to spread spending throughout the year.

Budgeting for Healthcare Costs

It’s open enrollment season, and most of us are thinking about the best healthcare option for us in 2020. Only one thing is certain when it comes to healthcare: the cost for us to stay healthy is constantly increasing.

When it comes time to choose a plan, there are multiple factors to consider so you can budget wisely.

Choose your plans based on more than the premium

People often select their healthcare plan based on the monthly fee they will pay for coverage each month. However, when you choose a plan based solely on this component, you could end up paying more in the long run. There are several other factors to consider when choosing a healthcare plan that will fit your health as well as financial needs. Factors include:

  • copayment (flat dollar amount you pay when you need care)
  • deductible (the amount you must pay before the insurance begins to pay)
  • coinsurance (the percentage of allowed charges for covered services that you’re required to pay)
  • maximum out-of-pocket costs (the maximum amount you will pay for services).

Take previous health history into account

You can’t predict the exact amount of insurance you or your family will need. But you can take your past medical history and family medical history into account when you’re selecting a plan.

By taking these factors into account, you should be able to get in the ballpark of the amount of coverage you’ll need, barring no serious medical emergencies.

Choose wisely

When you’ve signed on for healthcare coverage and the open enrollment period passes, you aren’t able to change your plan during the year unless you experience a big life event. Healthcare.gov describes a big life event such as marriage, having a baby, or losing your other healthcare coverage. If you experience one of those situations, you can amend your plan outside of open enrollment. Because of this, it’s important to choose a plan that works best for your health as well as your budget.

Plan ahead

While healthcare coverage can be good to have when it comes to covering medical expenses, it never hurts to have extra funds. Before an unexpected medical expense arises, plan ahead and set aside some money every month in a savings account. Anything you can stow away for a rainy day will be helpful when the time comes to use those extra funds. Scient Federal Credit Union is here to help. Talk to one of our Member Service Representatives today about setting up a savings account and be prepared.

Like most things in life, there’s no one-size-fits-all health insurance plan. You have to choose the best one for you and your budget.

*** This blog was written for financial purposes and not written by a healthcare professional. This article should not be taken as medical advice.

Make Your Money Work for You

Every day you hustle. Nose to the grindstone getting through the workday. You’re working hard for your money, but have you ever stopped to think how your money can work for you?

Making your money work for you goes beyond an emergency fund or simply being debt free – although, both concepts are a necessity in this instance. It’s about taking the money you’re already making and making it generate returns for you.

But, how? There’s no simple answer or even a single way to do it, but these tips can help you get started.

Get out of debt

First things first, if you have debt get rid of it. After all, you can’t invest in you and your future if you’re giving your money to other people. The first step to a debt-free life is figuring out exactly how much you owe. Most people don’t even know how much debt they’re in, according to a study from The Federal Reserve. Once you know how much debt you have, decide how you’re going to pay your debt.

Budget

The most important way to change the way you handle your money is to budget. By creating a budget, you are telling your money what you want it to do. When you assign each dollar into a category, you’re controlling where your money goes and what it does. It’s a great first step in reaching your financial goals. Think about it this way: your budget is like a fitness tracker in that it helps you monitor your money. When you monitor your money and know where it is and what it’s doing, it’s easier to make it do what you want it to do. Check out our monthly budget tool to help get you started

Utilize retirement accounts

Don’t sleep on opportunities to invest in a 401(k) or Roth IRA. A 401(k) is great because you’re contributing pre-tax money into your account, and you get free money from your employer in the process. Think about it like this: you earn $100,000 a year and your company offers a 3% match on your 401(k). If you invest $3,000 (3% percent of $100,000), your company will match that leading to $6,000 being added to your 401(k). A Roth IRA works just a little differently. Unlike the 401(k), a Roth IRA leverages after-tax income. However, when you begin to withdraw the money at retirement, you won’t pay taxes on your withdrawals.

Start a side hustle

Uber, GrubHub, Instagram – all of these companies began with an idea that blossomed into billion-dollar companies. What’s your passion and can you turn that into a billion-dollar idea? Consider starting a side hustle and find ways to make some extra money. It could be a traditional second job, a work-from-home job or turning your ideas into ways that add to your savings. If you can structure your budget and expenses around your primary source of income, any money you make from your side hustle can go straight into your savings.

Create passive income streams

Passive income is money you earn with little to no effort involved. Once it’s set up, passive income will earn you money while you sleep. Creative passive income does require some type of investment upfront, whether that’s time or money, but it’s an investment that can lead to huge payoffs later.

Building your future is important, and it takes a lot of hard work. At Scient Federal Credit Union, we’re just as interested in your future as you are. We want to help you take the necessary steps to make your dreams come true.

Maybe you need to consolidate your debt or look at options to pay off some debt. Maybe you’re looking to refinance your car in order to lower your payments and save a little money each month. Whatever it is, let us help you.

Stop by and see us or give us a call to get started.

Do Millennials Need Life Insurance?

The financial challenges millennials face can be overwhelming. Many young adults have to figure out how to pay off college loans, save to buy a home or start a family, and sock away money for retirement. Given these hurdles, it’s no wonder that life insurance as a financial asset gets little to no attention. But it should. There are many reasons to have life insurance at a relatively young age, but here are some common ones.

Leaving your debts for others to pay

As a young adult, you become more independent and self-sufficient. While you no longer depend on others for your financial well-being, your death might still create a financial hardship for those you leave behind.

You may have debts such as a mortgage or student loans that are jointly held with another person. Or you may be paying your parents for loans they took out (e.g., PLUS loans) to help pay for your education. Your untimely death would leave others responsible for some or all of these debts. You might consider purchasing enough life insurance to cover your financial obligations so others don’t have to.

Funeral expenses can also be a burden for those you leave behind. Life insurance could ease the financial burden of paying for your uninsured medical bills (if any) and for costs associated with your funeral and burial.

It’s less expensive

Premiums for life insurance are based on many factors, including age and health. Certainly, the younger and presumably healthier you are, the less your coverage will cost. This is especially true if you are at a high risk for developing a medical condition later in life.

Replacing lost income

Someone may be relying on your income for financial support. For instance, you may be providing for a family member such as a parent, grandparent, or sibling. In each of these instances, how would your income be replaced if you died? The death benefit from life insurance can help replace your income after you’re gone.

Providing for your family

As your family grows, so do your financial responsibilities. There is likely a hefty mortgage to pay. And there are costs associated with young children. If you died without life insurance, how would the mortgage get paid? Could your surviving spouse or partner cover the costs of day care and housekeeping?

And there are events you should plan for now that won’t happen until several years in the future. Maybe you’ll begin saving for your kids’ college education while trying to save as much as you can for your retirement. Over the next several decades, think about how much you could set aside for these expenses. If you are no longer around to make these contributions, life insurance can help fund these future accumulations.

Work coverage may not be enough

You may have a job with an employer that sponsors group life insurance. Hopefully, you take advantage of that program, but is it enough coverage to meet your needs now and in the future? Your insurance needs may change with time, although your employer’s coverage may not. Also, most employer-sponsored life insurance programs are effective only while you remain an employee. If you change jobs or are unable to work due to illness or disability, you may lose your employer’s coverage. That’s why it’s a good idea to consider buying your own life insurance.

The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications.

Don’t Let High APR’s Hold You Hostage

Actor Hill Harper said it perfectly: “Credit card interest payments are the dumbest money of all.”

This year wasn’t kind to credit cardholders’ wallets. In 2019, cardholders paid an average of 17% APR – the highest level recorded by the Federal Reserve since 1994. To put it into perspective: in 2009, the average APR registered just under 13% and in 2016 it hovered around 12.5%.

(See chart below)

credit karma apr chart

Even the maximum APR has climbed significantly. Financial institutions typically offer a wide range of APRs. As a result of the increase, maximum APRs are around 25% with the media standing at 21%.

So, what does this mean for you?

Well, it means you’re likely paying more in interest than you’ve ever paid. But, don’t worry. There are several ways around paying high interest rates that will actually help you in the long run.

Avoid balance carryover

Ultimately, the best and most responsible way to use a credit card is to pay off the balance monthly. By paying your balance in full each month, you avoid paying interest while reaping the benefits a credit card has to offer. Plus, it helps improve your credit score.

Avoid spending more than you have

We’ve all done it. We have a credit card for emergencies only, but something comes up we really want, and it finds its way to the credit card. Next thing you know, there are multiple unnecessary purchases on there that you’re trying to pay off. The best habit to get into is not spending more than you can pay off monthly. The more you put on a card, the more interest you’re going to be charged.

Do your research

If you’re thinking about signing up for a credit card, do your research. First of all, know your credit score. That’s going to be a huge factor in determining your APR. Also, consider why you want a credit card. Are you looking for cash back options? Do you want to earn points or build your credit? Don’t wander and apply aimlessly. Look at the specific types of cards that are designed for the purpose you want and see which card best suits your needs.

Obtaining and maintaining credit by using credit cards doesn’t have to be a scary experience. Have you talked to someone at Scient Federal Credit Union? We have several types of credit cards that could fit your needs.

Before you go with a big box bank, see how we can help. Stop by a branch, call us today at (860) 445-1060 or visit our Visa® card page.

4 Hacks to Raise Your Credit Score

Your credit score. Chances are you either love it or hate it. It’s either the greatest thing in the world or a total hindrance.

Or, maybe you don’t really know enough about your credit score for it to make an impact on your life.

As a whole, Americans’ credit scores are beginning to increase but our knowledge of credit and how it works is declining. A recent survey from credit scoring company VantageScore and the Consumer Federation of America found that 32% of the people surveyed didn’t know they had more than one credit score. That percentage has risen by about 16% since 2012.

Let’s forget about how many credit scores we have for a second and answer a very basic question: what is your credit score?

Your credit score is a three-digit number ranging from 300 (the lowest possible score) to 850 (the highest score). Lenders use your credit score to make decisions about whether or not to offer you credit – such as a credit card, car loan or mortgage loan. Your credit score is also used to determine the terms of the offer – what your interest rate will be and whether or not you’ll have to make a down payment.

Your credit score is calculated by looking at these categories:

  • Payment history
  • Your income-to-debt ratio
  • Total debt
  • Length of credit history
  • Types of open credit
  • Public records (such as bankruptcy)
  • Number of inquiries for your credit report
  • New credit

So, what is considered a good credit score?

The average credit score in the United States ranges between 670 and 710. According to Experian, a “good” credit score is anything that falls between 661 and 780, which is about 38% of the population.

To put that into perspective, to qualify for an FHA mortgage loan, your credit score has to be a 580 or higher with a 3.5% down payment. Usually, if an applicant falls in that “good” credit range, they’re likely to be approved for credit at competitive rates.

Now that we know what a credit score is and what classifies as good one, the next question to look at is: why does your credit score matter?

Think of your credit score like a report card you used to get while you were in school. Your report card measured your progress during the school year, and your credit activity puts you into a scoring range. But, unlike grades, credit scores aren’t stored as part of your credit history. Instead, your score is generated each time you apply for credit. Fun fact: it actually negatively impacts your credit score if you have multiple inquiries in a short period of time.

What are your major financial goals? Buying a home? Buying a car? Chances are, your credit is likely going to be a factor in framing that financing picture. Your score will actually tell a lender whether or not you qualify for a loan and how good the terms of the loan will be. For instance, the lower your credit score is, the higher your interest rate on a car loan will be.

If you’ve looked at your credit report, and you’re surprised to see it’s lower than you thought, don’t worry.

There are simple ways to fix that.

  • Pay your bills on time. That goes for ALL your bills – not just credit cards and loans. Fun fact: payment history is the most heavily weighted factor of your credit score. It makes up 35% of your credit score.
  • Keep your credit card balances low. Credit history accounts for 15% of your credit score so keep those old accounts open even if you don’t use them.
  • Space out your credit applications. Each time you apply for a line of credit, the inquiry is noted on your credit report. One or two inquiries aren’t a huge deal, but when you have a bunch within a two-year period, it can cause your score to fall.
  • Mix up your credit. Your credit mix, or the types of credit accounts you have, accounts for 10% of your credit score. Basically, lenders want to see that you can use different types of credit responsibly.

Credit doesn’t have to be scary or overwhelming. There are many responsible ways to start out slowly and build worthwhile credit for the future. Scient Federal Credit Union can help.

Are you looking for help building or establishing credit? We have a number of ways to start you on the right path. Let us help you! Stop by one of our branches today or give us a call to see what options we have.

How to Prepare for the Unexpected Expense

We can’t avoid unexpected expenses. Life happens.

Question is, how prepared are you to deal with life’s unexpected curveballs?

There’s no way to predict when life will happen. One minute you’re looking at a little extra money in the budget and feeling good about the small surplus. The next minute your new puppy swallows part of a chew toy, and you’re off to the vet. There goes your small surplus and budget.

Life’s unexpected events can be overwhelming and figuring out how to handle the new debt plus the monthly recurring debt can be stressful.

What happens if your car breaks down, you have to move, or your water heater has to be replaced? Illness and employment are equally as unpredictable. If you are laid off, how long could you pay your bills without living off credit cards or borrowing money? You’re not alone. Did you know that 40 percent of Americans can’t cover a $400 expense out of pocket?

So, what happens if you find yourself in this position? Believe it or not, you have a few options – smart, safe and legal options – to help cover those unexpected expenses.

Payment plans

Maybe haggling over a bill doesn’t come naturally to you, but this is a great way to save a little money each month. Most doctor’s offices and hospitals will work with you on payment plans as long as you are paying something on it each month. It’ll help show that you’re good for some of the balance now and can pay some later.

Avoid predatory lenders

Don’t let your circumstances make you feel like payday loans or predatory lenders are the only way out. Payday lenders prey on people who are vulnerable and in tight situations. In 2016, Google banned payday lenders from advertising on its site because of their predatory practices. They offer attractive offers, right? Lump-sum payment, a few weeks to pay it back – no sweat, right? Wrong. Most payday loan companies charge anywhere from $10 to $30 for every $100 borrowed which equates to an interest rate of almost 400%!

Beware of the credit card

Credit cards are definitely better than payday loans but are mindful of your interest rate on your card. If you’ve got a high-interest rate, you could be paying more in the long run if you don’t pay off the balance in full relatively soon. Also, if you’ve got a “no interest until” card, remember that while you’re not paying interest right now, if there is a balance on the card when the time period is up, your credit card company will retroactively add its interest rate to the amount left.

Get a personal loan

Even if your emergency doesn’t have a specific category, a personal loan can still be an option for you and the interest rate will oftentimes be much lower. Credit unions are a wealth of information and knowledge. They’re a really great resource for getting on the right track financially. They have who can help make sense of the best personal loan or the right credit card for you.

Our lending experts at Scient Federal Credit Union can talk you through the loan options we have and help you obtain the one best suited for your needs. We’re here to help. Getting off track financially happens, but it doesn’t have to be hard.

Stop by our branch or call us at 1-877-860-6928.

Back-To-School Savings Tips

It’s that time of year again!

Summertime is winding down. Teachers are prepping to return to their classrooms and start decorating. School supply lists are starting to surface. A new school year is right around the corner.

A new school year means only one thing – back-to-school shopping is almost here! Which means you’ll be sending your students back into the classroom before you know it.

According to the Huntington Backpack Index, in the 2018-2019 school year, the amount parents paid in back-to-school supplies was estimated as follows:

• $637 elementary school kids,
• $941 for middle school children, and
• $1,355 for high school students

There’s no way around it – school shopping is expensive. But, it doesn’t have to be. Much like financial planning, saving on back-to-school shopping requires a plan as well. With the right planning and preparation, back-to-school shopping doesn’t have to break the bank.

Take inventory

Before you go shopping and buy a bunch of supplies, take inventory of your house. Check drawers and cabinets to see what supplies you have that can be used again. Look at backpacks, lunchboxes and even school clothes from last year to see what can be kept and what needs to be replaced. From there, make a list and determine what your child needs and what you have.

Get the school’s supply list

Generally, retailers like Target and Walmart usually have copies of the supply lists divided by grade, school, and district, and those lists are usually available online before they’re in the store. Check the lists, do a little research regarding prices and make a budget accordingly. You can check with your child’s teacher to make sure you’re getting the most important items.

Don’t forget about discount stores and couponing

Do you want to save some real money? Purchase things like notebooks, pencils, and paper at discount stores. If you’re into couponing, you can save some big bucks there as well. Poke around the internet and see where the deals are before you hit the stores.

Take advantage of tax-free weekend

The tax-free weekend is a prime opportunity to save on back-to-school supplies. Depending on the states’ tax rate, shoppers can save anywhere from 4% up to about 9%. Tax-free weekend is held each year to coincide with the back-to-school season. Not sure when your state’s tax-free weekend is? Click here to find out.

If you want to see actual savings, don’t go into back-to-school shopping without a plan. Rather than charging up your high-interest credit card, talk with us about a loan with a plan that works for you. You’d be amazed at the savings you find.

Back-to-school shopping doesn’t have to be overwhelming or expensive. For help or questions about savings, check with any of our experts at Scient Federal Credit Union.

Stop by our branch or call us at 1-877-860-6928.

Is It Time to Declare Your Financial Independence?

 

No matter how much money you have or which life stage you’re in, becoming financially independent starts with a dream. Your dream might be to finally pay off the mountain of debt you’ve accumulated, or to stop relying on someone else for financial support. Or perhaps your dream is to retire early so you can spend more time with your family, travel the world, or open your own business. Financial independence, however you define it, is freedom from the financial obstacles that are keeping you from living life on your own terms.

Envision the future

If you were to become financially independent, what would change? Would you spend your time differently? Live in another place? What would you own? Would you work part-time? Ultimately, you want to define how you choose to live your life. It’s your dream, so there’s no wrong answer.

Work at it

Unless you’re already wealthy, you may have had moments when winning the lottery seemed like the only way to become financially secure. But your path to financial independence isn’t likely to start at your local convenience store’s lottery counter.

Though there are many ways to become financially independent, most of them require hard work. And retaining wealth isn’t necessarily easy, because wealth may not last if spending isn’t kept in check. As income rises, lifestyle inflation is a real concern. Becoming — and remaining — financially independent requires diligently balancing earning, spending, and saving.

Earn more, spend wisely, and save aggressively

Earn more. The bigger the gap between your income and expenses, the quicker it will be to become financially independent, no matter what your goal is. The more you can earn, the more you can potentially save. This might mean finding a job with a higher salary, working an extra job, or working part-time in retirement. And a job is just one source of income. If you’re resourceful and able to put in extra hours, you may also be able to generate regular income in other ways — for example, renting out a garage apartment or starting a side business.

Spend wisely. Look for opportunities to reduce your spending without affecting your quality of life. For the biggest impact, focus on reducing your largest expenses — for example, housing, food, and transportation. Practicing mindful spending can also help you free up more money to save. Before you buy something nonessential, think about how important it is to you and what value it brings to your life so that you don’t end up with a garage or attic filled with regrettable purchases.

Save aggressively. Set a wealth accumulation goal and then prioritize saving. Of course, if you have a substantial amount of debt, saving may be somewhat curtailed until that debt is paid off. Take simple steps such as choosing investments that match your goals and time frame, and paying yourself first by automatically investing as much as possible in a retirement savings plan. Time is an important ally in the quest for financial independence, so start saving as early as possible and build your nest egg over time. (Note that all investing involves risk, including the possible loss of principal, and there is no guarantee that any investment strategy will be successful.)

Keep going

Make adjustments. Life changes. Unexpected bills come up. Some years will be tougher financially than others. Expect to make some adjustments to your plan along the way, especially if you have a long-term time frame, but keep going.

Track your progress. Celebrate both small milestones and big victories. Seeing the progress you’re making will help you stay motivated as you pursue your dream of financial independence.

Scient Service Centers will be closing at 1:00pm on Tuesday, December 24 and closed December 25, in observance of the Christmas Holiday. You may access your accounts 24/7 via Home Banking and the Mobile App. Happy Holidays!