In today’s fast-paced world, financial well-being is more important than ever. However, achieving financial stability and freedom is not just about numbers and budgets. Whether you’re struggling with debt, trying to save for retirement, or simply looking to manage your money more effectively, a holistic approach to financial well-being can help you achieve your goals and live a more fulfilling life.

What is a Holistic Approach to Financial Well-Being?

A holistic approach to financial well-being is an approach that takes into account all aspects of a person’s financial life. This includes not only the traditional aspects of financial planning, such as budgeting, saving, and investing, but also the less tangible aspects, such as mindset, behavior, and lifestyle.

A holistic approach to financial well-being recognizes that financial health is not just about the numbers. It’s about developing a healthy relationship with money, making smart decisions about spending and saving, and aligning your financial goals with your values and priorities.

Benefits of a Holistic Approach:

Taking a holistic approach to financial well-being offers numerous benefits. By addressing all aspects of your financial life, you can achieve greater security, freedom, and happiness. Let’s take a closer look at some of the key benefits of a holistic approach:

1. Greater Financial Security: A holistic approach to financial well-being can help you create a more secure financial future for yourself and your family. By establishing a budget, saving for emergencies and future expenses, and investing wisely, you can reduce your financial stress and build a foundation for long-term financial stability.

Let’s say you establish an emergency fund of three to six months’ worth of living expenses. If you experience a job loss or unexpected expense, you’ll have a safety net to fall back on, which can help you avoid accumulating debt or falling behind on bills. Similarly, by investing in retirement accounts or other long-term investment vehicles, you can help ensure a secure financial future for yourself and your loved ones.

2. Improved Quality of Life: A holistic approach to financial well-being can improve your overall quality of life by reducing financial stress, increasing financial freedom, and freeing up resources to pursue your passions and goals. When you have a clear understanding of your finances and a plan in place to manage them effectively, you can enjoy greater peace of mind and focus on the things that matter most to you.

For example, if you’ve established a budget that allows you to save for a down payment on a house, you can feel confident in your ability to achieve that goal. This can help you feel more grounded and motivated in your everyday life, leading to greater happiness and fulfillment.

3. Enhanced Sense of Purpose: A holistic approach to financial well-being can help you clarify your values and priorities, and align your financial goals with your broader life goals. By understanding what matters most to you and what you want to achieve in life, you can make financial decisions that support those goals and bring a greater sense of purpose to your life.

Let’s say you’re passionate about travel, you might prioritize saving for a travel fund and cutting back on other expenses to make that a reality. This can help you feel more connected to your values and passions and give you a sense of purpose and meaning in your financial decisions.

4. More Sustainable Financial Habits: A holistic approach to financial well-being can help you develop sustainable financial habits that will support your financial well-being for years to come. By addressing the underlying causes of your financial behaviors, such as impulse spending or overspending, you can create lasting changes that will help you maintain your financial health over the long term.

Maybe you tend to overspend on clothes or gadgets; you might examine the underlying emotional or psychological factors that drive that behavior, such as a need for instant gratification or a desire for social validation. By addressing these factors and developing healthier coping mechanisms, such as mindfulness or self-reflection, you can create lasting changes in your financial habits that will support your financial well-being for years to come.

The Key Components of a Holistic Approach

So, what are the key components of a holistic approach to financial well-being? Here are some of the most important:

1. Mindset and Behavior – Developing a healthy mindset and positive financial behaviors is a crucial aspect of financial well-being. This includes understanding your relationship with money, practicing self-control, and avoiding impulsive financial decisions.
2. Budgeting and Financial Planning – Developing a budget that works for your lifestyle, tracking your expenses, and creating a long-term financial plan are crucial components of financial wellness.
3. Saving and Investing – Building an emergency fund, saving for future expenses (such as a down payment on a house or retirement), and investing your money wisely can help you achieve your financial goals and provide financial security.
4. Debt Management – Managing debt is an essential part of achieving financial well-being. This includes understanding the types of debt you have, prioritizing debt repayment, and avoiding taking on too much debt.
5. Insurance – Protecting yourself and your assets with appropriate insurance coverage is crucial to avoiding financial disasters. This includes health insurance, disability insurance, life insurance, and property and casualty insurance.
6. Estate Planning – Preparing for the future and ensuring that your loved ones are taken care of after you pass away is an essential component of financial wellness. This includes creating a will, establishing trusts, and making plans for any business interests.

Putting It All Together

By taking a holistic approach to financial well-being, you can create a more secure financial future for yourself and your family, enjoy greater peace of mind and freedom, and align your financial goals with your broader life goals. To get started, take some time to reflect on your financial goals, values, and priorities, and then develop a comprehensive plan that takes into account all aspects of your financial life. With time, effort, and commitment, you can achieve greater financial security, stability, and happiness.

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Life can throw unexpected financial challenges our way at any time. It can be overwhelming and stressful, whether it’s a sudden job loss, unexpected medical bills, or other unexpected expenses. But there are ways to navigate these challenges and come out stronger on the other side. This article will provide some tips and strategies for coping with financial challenges and emerging from them in one piece.

Coping with Job Loss:

Job loss is a difficult and often unexpected challenge many people face at some point. Coping with job loss can be a daunting task, especially if you were not prepared for it financially. However, with the right mindset and strategies, navigating through this challenging time is possible and coming out stronger on the other side.

The first step in coping with job loss is acknowledging your emotions and allowing yourself to feel them. Losing a job can be a traumatic experience, and it’s natural to feel a range of emotions, such as anger, frustration, and even depression. Give yourself time to process your emotions and seek support from friends, family, or a professional therapist if needed.

The next step is to evaluate your finances and create a budget. Take a hard look at your current financial situation and determine what expenses are essential and what expenses can be cut back or eliminated. This may require making some difficult choices, such as downsizing your living arrangements, selling unnecessary possessions, or finding ways to reduce your monthly bills. Creating and sticking to a budget will help you manage your finances and prevent you from falling into during this difficult time debt.

It’s also important to explore all available options for financial assistance. This may include applying for unemployment benefits, seeking assistance from charitable organizations or non-profits, or even borrowing money from friends or family members. Don’t be afraid to ask for help, as there are resources available to assist you during this challenging time.

In addition to addressing your immediate financial needs, it’s also important to use your time off to reevaluate your career goals and explore new opportunities. Consider taking courses, attending workshops to enhance your skills, or even pursuing a different career path. Take advantage of networking opportunities and job fairs to connect with potential employers and explore job opportunities that align with your skills and interests.

Finally, it’s important to take care of your mental and physical health during this challenging time. Job loss can be a stressful and emotionally taxing experience, so it’s important to prioritize self-care. This may include exercising regularly, practicing relaxation techniques such as meditation or yoga, and seeking support from friends and family.

Dealing with Medical Bills:

Dealing with unexpected medical expenses can be a daunting and stressful experience, but there are steps you can take to cope with the financial challenges. Here are some tips for managing medical bills and expenses:

1. Review Your Insurance Coverage: Start by understanding your insurance coverage and what medical expenses are covered. Read the fine print and make sure you understand your deductibles, co-pays, and out-of-pocket maximums. Knowing what is covered and what you are responsible for paying can help you plan and budget for your medical expenses.
2. Negotiate Medical Bills: If you receive a medical bill that you cannot afford, do not hesitate to negotiate with the provider or hospital. Many providers are willing to work with patients on payment plans or offer discounts for those who are uninsured or underinsured. You can also ask for an itemized bill to ensure you are not being charged for unnecessary procedures or services.
3. Utilize Payment Plans: If you cannot pay your medical bills in full, consider setting up a payment plan with your healthcare provider. Most providers offer payment plans with no interest or fees, which can help make your bills more manageable.
4. Look into Assistance Programs: Various assistance programs are available to help with medical expenses, depending on your income level and specific medical needs. Some hospitals and providers offer financial assistance programs, while government programs such as Medicaid or Medicare can also help with medical bills.
5. Consider a Health Savings Account (HSA): If you have a high-deductible health plan, you may be eligible for a Health Savings Account (HSA). This tax-advantaged savings account can be used to pay for medical expenses. Contributions to an HSA are tax-deductible, and withdrawals for qualified medical expenses are tax-free.
6. Seek Legal Advice: If you are facing significant medical bills and cannot afford to pay them, consider seeking legal advice. A bankruptcy attorney or financial advisor can help you understand your options and provide guidance on how to manage your debts.

Remember, dealing with medical expenses can be overwhelming, but there are resources available to help you manage your bills and cope with financial challenges. It’s important to stay informed, ask questions, and seek help when needed.

Coping with Unexpected Expenses

Dealing with unexpected expenses can be a stressful and challenging situation for anyone. The first step to cope with unexpected expenses is to prioritize them based on their importance. Determine which expenses are absolutely necessary and which can be postponed or eliminated. This will help you create a plan to manage the unexpected expenses and avoid additional financial stress.

One way to cope with unexpected expenses is to create an emergency fund. An emergency fund is a savings account that is set aside specifically for unexpected expenses. Ideally, your emergency fund should contain enough money to cover at least three to six months of living expenses. If you don’t already have an emergency fund, start by setting a goal to save a certain amount of money each month until you reach your desired amount.

Another way to cope with unexpected expenses is to consider alternative sources of income. This could include picking up a side job or gig, selling unused items, or renting out a spare room in your home. Be creative and think outside the box when it comes to generating extra income to help cover unexpected expenses.

If you’re struggling to cope with unexpected expenses, it’s important to reach out for help. Don’t be afraid to seek advice and support from family, friends, or a financial advisor. They may be able to offer helpful tips and suggestions for managing your expenses and getting back on track.

It’s also important to remember that unexpected expenses are a normal part of life. While they may be difficult to manage at the time, they can also provide an opportunity to learn and grow. By staying positive and proactive, you can navigate financial challenges and come out stronger on the other side.

In conclusion, navigating unexpected financial hardships can be difficult but not impossible. By taking a proactive approach and developing a plan, you can minimize the impact of unexpected expenses and emerge with your financial health intact. Whether it’s coping with job loss, medical bills, or unexpected expenses, remember to stay positive! Taking advantage of resources available to you and exploring creative solutions to overcome the challenge will payoff. With the right mindset and a bit of perseverance, you can overcome any financial challenge that comes your way. As always, you got this!

The post Surviving Unexpected Financial Hardships in One Piece appeared first on Affording Freedom.

Tax season can be a daunting time of year for many people, but it doesn’t have to be! With a little bit of planning and effort, you can maximize your deductions and minimize your tax liability, putting more money back into your pocket. In this article, we’ll explore some tips and strategies for tax planning that will help you do just that, all without losing your mind in the process.

First and foremost, it’s important to stay organized. Keeping track of all your receipts and important documents throughout the year will make tax season a breeze. Consider using a digital tool like QuickBooks or Excel to keep track of your expenses and income. You can also use apps like Expensify or Shoeboxed to easily capture receipts on the go. With everything in one place, you’ll be able to quickly and easily gather all the information you need to complete your tax return accurately and efficiently.

Once you’re organized, it’s time to start thinking about deductions. Deductions are expenses that you can deduct from your taxable income, lowering your overall tax liability. There are a variety of deductions available, but here are a few that are commonly overlooked:

1. Charitable donations: If you made any charitable donations throughout the year, be sure to keep track of them. You can deduct the value of any donations you made to qualified charitable organizations.
2. Home office deduction: If you work from home, you may be eligible for a home office deduction. This deduction allows you to deduct a portion of your home expenses, such as rent, mortgage, utilities, and insurance, based on the percentage of your home that you use as a workspace.
3. Job search expenses: If you were looking for a job in the same field as your previous job, you may be able to deduct some of your job search expenses, such as transportation costs and resume preparation fees.
4. Student loan interest: If you’re paying back student loans, you may be able to deduct up to $2,500 of the interest paid on those loans.
5. State and local sales tax: If you live in a state with no income tax, you can deduct the amount you paid in state and local sales tax.

It’s important to note that not all deductions are created equal. Some deductions have income limits or other restrictions, so be sure to do your research and consult with a tax professional to determine which deductions are right for you.

Another important aspect of tax planning is timing. By carefully timing your income and expenses, you can potentially reduce your tax liability. Here are a few strategies to consider:

1. Contribute to a retirement account: Contributions to traditional IRA or 401(k) accounts are tax deductible, so consider contributing as much as you can afford to lower your taxable income.
2. Time your capital gains: If you have investments that have increased in value, consider selling them after holding them for more than a year to qualify for the lower long-term capital gains tax rate.
3. Time your business expenses: If you own a small business, consider timing your expenses to maximize deductions. For example, if you need to purchase new equipment or inventory, consider doing so at the end of the year to take advantage of deductions for that tax year.
4. Bundle your expenses: If you’re close to the threshold for itemizing your deductions, consider bundling your expenses in a single year. For example, if you’re planning a home renovation, consider doing it all in one year to maximize your deductions.
5. Consider a Health Savings Account (HSA): If you have a high-deductible health plan, consider contributing to an HSA. Contributions to an HSA are tax deductible and can be used to pay for qualified medical expenses.

In addition to deductions and timing, there are a few other tips to keep in mind when tax planning.

One important strategy is to maximize your tax credits. Tax credits are different from deductions in that they are a dollar-for-dollar reduction in your tax liability rather than a reduction in your taxable income. Here are a few tax credits to consider:

1. Earned Income Tax Credit (EITC): This credit is available to low and moderate-income earners and can be worth up to $6,660. To qualify, you must meet certain income and other requirements.
2. Child Tax Credit: If you have children under the age of 17, you may be eligible for a credit of up to $2,000 per child.
3. Education Credits: There are several tax credits available for education expenses, including the American Opportunity Credit and the Lifetime Learning Credit.
4. Adoption Credit: If you’ve adopted a child, you may be eligible for a tax credit of up to $14,300 per child.

It’s important to note that tax credits also have income limits and other restrictions, so be sure to research and consult with a tax professional to determine which credits you’re eligible for.

Another important aspect of tax planning is understanding the tax laws and regulations. Tax laws and regulations can change from year to year, so it’s important to stay up-to-date on the latest changes. For example, the Tax Cuts and Jobs Act (TCJA) of 2017 made significant changes to the tax code, including increasing the standard deduction, limiting the state and local tax deduction, and eliminating certain deductions.

In addition, the COVID-19 pandemic has led to a number of changes to the tax code, including new deductions for pandemic-related expenses and changes to deadlines and requirements. Staying informed about these changes can help you maximize your deductions and minimize your tax liability.

In conclusion, tax planning doesn’t have to be a daunting task. By staying organized, maximizing your deductions and credits, timing your income and expenses, staying up-to-date on tax laws and regulations, and working with a tax professional, you can maximize your tax savings and put more money back into your pocket. So don’t dread tax season – embrace it as an opportunity to take control of your finances and improve your financial future!

The post Mastering Tax Planning: Proven Strategies for Maximizing Deductions and Slashing Tax Liability appeared first on Affording Freedom.

We all want to retire. Right? Retirement looks different to everyone, but whether it is sipping drinks on the beach to traveling the world, our dream retirement seems increasingly out of reach. Thankfully, we can all get the retirement we want with proper planning and using the right tools! Unfortunately, relying on social security checks isn’t guaranteed for future generations anymore, so we need to be proactive about our retirement planning. In our mastering retirement series, we will cover all things retirement, from selecting the types of account you need to investing strategies and everything else in between.

What Type of Retirement Account Is Best For Me?

There are a number of different types of retirement accounts and plans available, but it all depends on your unique situation as to what makes the most sense for your financial goals. Luckily, several different types of retirement accounts offer tax incentives for saving for the future and get us on our way to mastering retirement.

We are going to cover a few different categories of retirement plans which should give you a little more clarity on what is available to you. The two fundamental types of retirement plans we are going to focus on in this article are:

• Workplace Retirement Plans: 401(k)s, 403(b)s, 457(b)s
• IRAs: Roth, Traditional, Self, Spousal

This can get a little overwhelming, so we highly suggest talking with a financial coach or advisor to get more clarity before proceeding with any of these plans. Click here to check out our link on choosing retirement investments and the options you have available to you!

Workplace Retirement Plans:

There are two major kinds of workplace retirements plans:

1) Defined Benefit Plans:

When you hear defined benefit plans, think of a pension. The employee contributes a percentage of the salary annually to the pension, and then once they retire, they are paid a set amount monthly based on their years of service and the final salary they made before they retired. Essentially the more years you worked and the higher you were paid, the more you received monthly from your pension.

These plans are rarer today, but teachers, government officials, law enforcement officers, insurance employees, and nurses are typically among the small list of occupations that are offered pension plans.

Key Facts:

• Set monthly income received for retirement based on years worked and salary during that period of time.
• Makes budgeting for retirement very straightforward.
• You are automatically saving for retirement just by showing up to work if you enroll in the pension!
• Typically there is a minimum number of years worked to qualify to receive payouts.
• Typically does not exclude you from receiving social security in addition to a pension.
• Zero income restrictions.

2) Defined Contribution Plans:

These plans are by far the most common type of workplace retirement plans available in the marketplace. You probably have heard of a 401k in which employees contribute to their individual accounts, and money is usually taken directly from the paycheck and deposited into the 401k. A lot of companies offer a company match up to a given percentage which means they will match you dollar for dollar up to the match %. In other words, it’s free money to invest for your retirement. This free money usually takes time to be “vested,” which essentially means in order to receive the full match, you need to work at the company for a certain amount of years. Ensuring you are fully vested and taking advantage of free money sure makes mastering retirement alot easier.

401(k)

• Employees often match a portion of the money you put into your account each year.
• Typically there is a vesting schedule that requires you to work at a company for a given period of time before the money they have put in the account for you is truly yours. (Ex: 1st year 20% vested, 2nd year: 40% vested, 5th year: 100%)
• 401(k) has no income restrictions.
• Both Traditional and Roth 401(k) have annual contribution limits. ($20,500 for 2021)
• Taxes are deferred until the money comes out of the account.
• You are required to start withdrawing from your 401(k) at 70.
• Early withdrawal penalty until 59_^1/2 years old.

403(b)

If you didn’t read the 401(k) bullet points, please go back and read it because a 403(b) is almost identical except for a few minor differences.

• 403(b) plans share almost every characteristic of a 401(k) from the employee perspective.
• 401(k) is offered by for-profit companies, whereas a 403(b) is being provided by tax-exempt organizations such as nonprofits, religious organizations, schools, hospitals, etc..
• 403(b) plans offer fewer investment options than the 401(k)
• Few of these plans offer matching programs.

457(b)

• In the first three years before retirement, you can contribute double the annual limit which would be $41,000 in 2022. This is subject to limitations based on the amount you have contributed in previous years. (IRS Docs)
• You can withdraw your money as soon as you leave your job with a 457(b) without incurring any penalties.
• Few of these plans offer matching programs.
• Potentially can contribute to both a 457 and a 403(b) or 401(k) plan if the employer offers such a plan.

IRAs

The IRA (Individual Retirement Account) is one of the most common retirement plans and provide the building blocks for mastering retirement. Any individual can set up an IRA at a financial institution to hold investments for their retirement. These investments can range from mutual funds, stocks, bonds, REITs, cash, and real estate, depending on the type of IRA you select. There are many different IRAs that all offer tax benefits and reward you for saving.

The two most common IRAs are the Traditional and Roth. The key characteristics of these plans serve as the basis for the other two other IRAs we will be talking about: The spousal and self-directed IRA.

Self Directed IRA

Truly mastering retirement can be difficult when you feel limited by how and where you can invest your hard-earned money; self-directed IRAs solve this problem. Self-directed IRAs provide more flexibility to invest in different types of asset classes that have been traditionally not available to the everyday consumer. They give you greater access to how, what, and why you invest your money to meet your retirement goals. The IRS provides a list of prohibited investments in IRS publication 590. and all other investment types are allowed as long as the IRS rules are followed.

This option is not needed for everyone but can be very helpful depending on your long-term goals. If you are interested in learning more about the self-directed IRA check out this article for a more in-depth look.

Spousal IRA

It is important to note that there is no special spousal IRA account type but rather it is just a typical IRA account in the name of the non-working spouse. A Spousal IRA allows working spouses to contribute to an IRA for their non-working spouse. This provides a number of benefits such as the family to double the amount they can put into their retirement account as a family while also ensuring the other spouse is taken care of during retirement years.

When dealing with IRAs, you must have earned income in order to contribute to an IRA. The spouse IRA is the exception to the rule that allows for married individuals that file jointly to have an IRA in a name without the spouse working.

Key Facts:

• Couple must file taxes as “married filing jointly.”
• Is owned by the non-working spouse.
• Available in both traditional and roth IRA formats.
• Increased flexibility for married couple to save for retirement.

Although mastering retirement may seem impossible, there are a number of resources available to you to make your dream retirement a reality. Taking advantage of workplace retirement plans and/or IRAs will get you well on your way to ensuring a healthy and financial secure retirement.

There are a number of different IRAs available to choose from but make sure you aren’t going through this journey alone. Talk with your financial advisor to determine which plan could be right for you.

As always, you got this!

The post Mastering Retirement — How to Select The Right Retirement Account appeared first on Affording Freedom.

Retirement planning can feel daunting for many of us. We all have this idea of sipping Pina Coladas on the beach somewhere as we enjoy life without having to work. Unfortunately, that reality, especially in America, is not going to be the case for a vast majority of Americans. Americans are behind on retirement savings, straddled in debt, and lacking options. This doesn’t have to be you. Many different retirement vehicles can prepare you for a better tomorrow while giving you tax ride-offs today, whether that be through a 401k, Traditional or Roth IRA, pension plan, or a few others. These are great options for retirement but don’t give you complete control over how and what you are doing with your retirement money. Now, this isn’t a big deal for some of you, but if you want more control over how you invest, you do have another option available to you. Today we will talk about this little-known secret giving you more control over how you allocate your retirement fund, and it’s called a self-directed IRA.

Why Haven’t I Heard Of A Self Directed IRA Before?

Self-directed investing in an IRA has been allowed since the government first established IRAs in 1974. Before we go any further, we need to go over a vital component of any IRA which is the function of a custodian. Custodians are required in any IRA to maintain tax-deferred or tax-free status and essentially make sure you follow the government’s regulations.

The main reason it hasn’t received as much attention as its counterparts is most custodians who offer retirement accounts focus on traditional investment options like stocks, bonds, and mutual funds. The large firms that act as custodians usually don’t provide investment options in alternative because they are limited by the types of investments they offer at that particular firm. These firms make more money by providing investments in traditional assets that are easier to manage than non-traditional assets. Because of this fact, if you ask some of the larger custodians if you can invest in non-traditional assets, the answer you will most often get will be “no” or “I’ve never heard of that before.”

Why Self Directed IRA?

You might be thinking to yourself, what all does a self-directed IRA allow me to invest in? The answer is quite a bit longer than you might think. Self-directed IRAs give you greater access to how, what, and why you invest your money to meet your retirement goals. The IRS provides a list of prohibited investments in IRS publication 590. and All other investment types are allowed as long as the IRS rules are followed.

Allowable IRA Investments:

Non-Permitted Investments In An IRA:

Self-directed accounts do have a few additional rules to follow just by nature of having more control over your money that you need to be aware of.

The Arm’s Length Rule:

The IRS rule states that you and your investments must be at arm’s length. Essentially, the IRS wants to make sure that you can’t directly benefit from assets owned by the IRA today.

This might seem strange but remember the purpose of an IRA is not intended to benefit you now but rather your future self. You are planning for retirement, and that benefit will be received in the future. Any IRA transactions that benefit you personally are strictly prohibited. The golden rule is if an investment you have gives you a benefit today, it is not allowed. However, if it is a deferred benefit, that is permitted. Here are some common examples below:

• Personally Using IRA Property: Using real estate purchased through your IRA as a primary residence, vacation home, office space, or any space that could benefit you personally today is strictly prohibited.
  • You can purchase rental properties, but you can’t live or rent them to yourself or a disqualified person. (We will go over disqualified persons in the next section.)

• Receiving Personal Benefits from Your IRA: This is relatively straightforward, but you are not allowed to lend yourself or any disqualified person money from your IRA. You are also not allowed to pay yourself, a company you own, or another disqualified person to do work or manage any investment you own.
• Revenue and Expenses: The basic idea here is all income and expenses are received by and paid from the IRA. If your IRA owns a rental property, rents should be put directly into your IRA without touching your personal account, and all expenses should be paid directly from the IRA.

Disqualified Persons:

The IRS mentions disqualified persons frequently, and it is essential to know who those people are. The IRS states that a self-directed IRA may not buy an investment from, sell it to, or be involved with disqualified persons. Disqualified persons are your ascendants (grandparents and parents) and descendants (children and grandchildren).

Siblings, nephews, cousins, best friends, parent in-laws, aunts, and uncles are NOT disqualified persons and are perfectly fine to invest in and with.

In Summary:

Self-directed IRAs provide more flexibility to invest in different types of asset classes that have been traditionally not available to the everyday consumer. This option is not needed for everyone but can be very helpful depending on your term goals. Before opening an account, talk with a financial coach or advisor and see if this option makes sense for your retirement goals.

The post Self Directed IRA — Get Control Over Your Retirement appeared first on Affording Freedom.

Being told to save more money is often frustrating. You intuitively know that spending less than you make is a good thing, but often life gets in the way. The car needs a new battery, an appliance breaks down, the dog gets sick, and the savings you thought you had suddenly go away in an instant. Does this sound a little too familiar? At the end of the day, if you wait for everything to be “perfect” before you start saving money, you will be waiting forever. Life will always throw punches our way; that is a fact. The good news is we are in complete control of how we respond to those punches. There are plenty of straightforward and practical ways to save money regardless of your financial situation. They might not feel like you are getting anywhere or making a significant enough dent, but a slight change made daily has a dramatic impact on your future. Here are 12 practical tips to save more money and get you a little extra breathing room in your budget and your life.

1) Shop in Bulk.

Stores like Costco and Sam’s have their business models wholly based on customers buying in bulk. When buying in bulk, the number one thing to consider is that it’s not the price of the item you should focus on; it’s the price per unit (or ounce) that really makes a difference. My wife and I have been buying diapers from Sams Club, and we have reduced our unit price from $.25 to $.11 per diaper. This may not seem like a substantial savings amount, but she used 12 diapers a day for the first three months of her life. That’s a significant amount of diapers! By dropping the unit price by a little over half, we were able to get a savings of $151.20 just on diapers alone!

As long as the expiration date of the items you are buying you feel confident will be used by that date, buying in bulk can save you a substantial amount in the long run!

2) Coupons! Coupons! Coupons!

When used efficiently, coupons are one of the most practical tips to save more of your money. Couponing for my wife and I have become a way of life. I’m not sure we have paid full price for anything in our house. If it is not on sale, we aren’t buying it. It’s as simple as that. The average couponer, which is defined as using at least one coupon in a 30 day period, averaged a savings of $36.80 a month, which equates to an annual savings of $441.60.

Sites like Ibotta, RetailMeNot, Honey, and Groupon are just a few examples of ways to get great savings very easily.

3) Just Because It Is On Sale Doesn’t Mean You Should Buy It.

This might be the most effective of all of the practical tips to save more of your money on this list.

Do you know what’s cheaper than purchasing something on sale? Surprisingly the answer is not a better sale—it is not buying the item in the first place. Often this is a lot easier said than done though, especially if your money archetype enjoys spending.

If sales are traps for you to spend more money, knowing that about yourself is half the battle! Try some of our budgeting methods to ensure that the savings you get are not chains you are putting on yourself.

4) Compare Insurance Policies

Shopping and comparing insurance policies can be a total pain. It can feel challenging to look through all the options and find a policy that works for you. Fortunately, that’s where sites like Policy Genius come into play! Policy Genius users report an average savings of $690 a year by switching their coverage. They make it easy to compare policies, and the savings are substantial. At least take a look because you may be paying more than you need to!

5) Check Your Recurring Expenses

It seems like everyone is offering a subscription these days. It is almost scary how easy it is to pay for multiple different subscriptions such as Netflix, Hulu, Apple Music, gym memberships, Amazon Prime, etc. These prices are manageable individually, but when stacked together, the cost starts to add up.

It’s healthy and necessary to cancel any subscriptions you don’t use regularly. It may feel daunting even to know what subscriptions you have, and if that’s the case, I recommend TrueBill. They can track and let you see all your subscriptions for free in one place!

6) Compare Phone and Internet Plans

Depending on where you live, this may not be entirely possible because you might only have one provider that will service the area. However, if you live in a city, make sure you compare the cost of phone and internet plans. By eliminating data plans, phone insurance, and unneeded warranties, you can save a substantial amount on your bill.

Also, think about sharing a family plan with friends to cut back on the cost because they typically offer discounts with more than one phone line. This way, everybody wins!

7) Cut The Cord

The average monthly price for cable TV is over $217 a month, equating to $2,604 a year. With how expensive TV has gotten, the cut the cord revolution that is occurring is of no surprise to anyone. There are so many alternatives to cable, thanks to streaming services like youtube, Hulu, etc…

The goal of cutting the cord is to save money, so only purchase a subscription you will use. It is very easy to have ten streaming services with prices over what it would cost for cable if you aren’t careful. But if you are diligent, you can dramatically increase your margin with one or two streaming providers while not sacrificing any of your entertainment value.

8) Stop Buying Brand Names.

One of the most effective on our list of practical tips to save money is to ditch brand names and buy generic. Almost every major retailer has a value brand that is highly comparable to its Name brand partner at fractions of the cost. This goes from everything from medicine, food, cleaning supplies, etc. 99 times out of 100, you are just buying the marketing of the brand name rather than a superior product. Yes, the logo may be cool, but your savings are far superior to any logo.

9) Cook Your Meals.

The average family in the United States spends roughly $3,526 each year on food outside of the home. That’s almost $300 a month on eating out! It is so easy and convenient to buy food on your way home from work, or if you are just simply too tired to cook after a long day, bringing dinner home is often the choice.

By budgeting and cooking your own meals, you can save and eat better on a regular basis! For the cost of a dinner out, you can have steak for a few meals at home. It’s more cost-effective, better for you, and will produce financial margin in your lives without too much sacrifice.

10) DIY Time.

Yes, it is sweat equity time! Thanks to youtube and a quick google search, you can practically learn how to do any home project for a fraction of the cost. Want to learn how to tile, add a deck, fix your brake light, and change your car’s oil? Youtube can help with all of these things, and your savings will be substantial.

My good friend has a Costco membership, and he profits from it every year just by buying oil and following a youtube video to learn how to change his car’s oil. By rolling up your sleeves, how much you can save and learn is remarkable!

11) Bye-bye, Starbucks!

Yup. I went there. This is a tough one for many of us coffee addicts out there. Unfortunately, the math doesn’t lie to us. The $5 daily cup of coffee adds up to over $150 a month! We can still enjoy coffee; we just need to work smarter, not harder.

By buying local beans and a quality coffee maker, your return on investment will still be much quicker than buying a cup of joe, and the savings over the long run will be substantial.

12) Sell old stuff (well, really anything that doesn’t bring your joy!)

My wife loves Marie Kondo. There was a period in life when that was all we had on tv, but you know what? She has the right idea. Clutter causes stress in your life, and by selling things you don’t need, you gain a little cash plus peace of mind.

From personal experience, my own home feels like a magnet for unwanted stuff. My wife and I regularly go through our home and get rid of things that we don’t even know how, when, or where we got them. The best feeling we have is decluttering our home from unwanted or unneeded things, plus the extra cash is always a nice bonus.

The post 12 Practical Tips to Save More Of Your Money appeared first on Affording Freedom.

It is safe to say that the pandemic completely changed life for a lot of us. The bedroom became the new office, work-life balance became feasible albeit difficult, thousands of people quit their jobs, and home prices skyrocketed all across the country. With all the turmoil and change across the country, unique opportunities have come about where employers will pay you to move.

An increasing number of cities are beginning to offer money to bring remote talent to them, especially after the pandemic has forced everyone to rethink and evaluate what remote work looks like for our society and companies. If your job allows you to work from home, it might not be a bad idea to add a little extra cash into your pocket for doing so.

These 10 locations will pay you to move with your families to live and work! If you are looking for something new or maybe just a way to increase your financial margin, you might just be in luck.

1) Arkansas

The Northwest Arkansas Council is shelling $10,000 to recruit remote workers to live and work there. It is has been voted as one of the best places to live in America thanks to its meager cost of living, outdoor activities, great culture and cuisines, and per capita income that is 14% higher than the national average. The Northwest Arkansas region offers a unique opportunity for those who are selected and looking to escape the busy cities and suburbs.

2) Oklahoma

Tulsa, Oklahoma has become highly aggressive in attracting remote workers to the area. In 2018, Tulsa began to start offering individuals $10,000 to move and live there with the Tulsa Remote program. Tulsahas already begund to expand their program with a new incentive to help make ownership a reality with $10,000 toward a downpayment. With the average home price of just $157,000 in Tulsa, that $10,000 covers almost 30% of your down payment!

3) West Virginia

Thanks to West Virginia’s Ascend program, they are offering $12,000 plus a year free of outdoor recreation for moving to the state, no strings attached! If you enjoy the great outdoors and want to experience more of what nature has to offer, this could be for you. The application is looking for remote workers who can bring their business/work to West Virginia.

4) Alabama

The Shoals, Alabama will pay you $10,000 in the first year for moving to this beautiful area. The eligibility requirements are:

• Minimum yearly income of $52,000
• Move within six months
• Full-time remote or self-employment outside the area
• 18 years or older

If this is you, you might want to consider this opportunity seriously. Experience a wide variety of culinary experiences, outdoor activities like hiking, fishing, and golfing, shopping, music, and nightlife.

5) Spain

Ponga, Spain is a beautiful village located in Spain’s Asturias region, which has stunning natural features that will pay you to move. They do however have one major problem, it lacks enough people to sustain the population with only 800 inhabits to its name! Because of this, there is an opportunity for young couples to move there and get paid 3,000 euros, with an extra 3,000 euros awarded for every child they have. One major catch is that you must live in the area for 5 years. If you are drawn to adventure and a very low cost of living, this might be for you!

6) Switzerland

Albinen, The beautiful mountain town in Switzerland is so desperate for new life in their village they have voted to pay each new adult who moves their $25,000 plus an additional $10,000 for each child the couple has. So for a family of four this alpine village pays $70,000 to make Switzerland your new home. With this type of many being paid out, there are a few requirements:

• You must be younger than 45
• Agree to live in the village for 10 years
• Have to build or live in a house that cost at least $200,000

This small town hopes to entice 10 families over the next few years, and competition is fierce, so hurry and apply if you are interested in this unique opportunity.

7) Kansas

Topeka, Kansas, pays up to $15,000 for you to move through the Choose Topeka program. The program pays up to $10,000 for renting in the first; year and up to $15,000 for a home purchase. Plus, Jimmy John’s is offering an extra $1,000 if you relocate to one of its three delivery zones. Yes, that is not a joke. You get paid to move near a Jimmy John’s. Plus with the average family home cost of $125,000, that down payment can go a long way!

Choose Topeka Remote Requirements are:

• Your employer must be located outside of Shawnee County
• Minimum 3 month waiting period
• One relocation incentive per household
• Eligible to work in the U.S.

Choose Topeka On-Site Requirements:

• Confirm with your employer if they participate in the Choose Topeka relocation incentive
• Move for a full time position to Topeka
• Purchase or rent a home within a year of the move

8) Vermont

Vermont is the next state on our list that will pay you to move. They offer specific grants, such as the New Relocating Worker Grant and the New Remote Worker Grant. Both of these grants offer up to $7,500 in relocation expenses to encourage workers to move to Vermont and either work from home or work for Vermont employers.

Requirements for the grants for 2022 are:

• Relocated to Vermont, became a full-time resident; and
• Is working full time remotely for an out-of-state employer from a home office or coworking space located within VT; and
• The applicant’s wage equals or exceeds the Vermont livable wage rate as updated 1/15/21 in accordance with 2 V.S.A. §526. Currently this is $13.39 per/hour; and
• Incurred qualified relocation expenses; and
• Is subject to Vermont income tax

9) Alaska

Alaska will pay you to move thanks to the Alaska permanent fund, which is a 65 billion dollar fund managed by a state-owned corporation fueled by oil and gas revenues. All resident are eligible to apply typically earn $2,000 a year from this fund. Typical residents use this money on things like medical emergencies, travel, student loan payments, and leisure. They do not offer relocation centers but do you pay an ongoing dividend thanks to this fund.

10) Minnesota

Harmony, Minnesota will pay you to move to their beautiful remote town. With a population of 997 and beautiful sites and the added benefit of $12,000 in cash rebates toward the purchase of a new home makes this choice pretty attractive. Harmony is home to Niagara Cave, one of the top ten caves in the United States. With a median home value of $161,378, your 12,000 rebate will make a healthy dent in your down payment.

The post 10 Cities That Will Pay You To Move appeared first on Affording Freedom.

The mention of financial planning just made some of you start sweating. It can be extremely stressful trying to create a plan and often requires quite a bit of work but is it really worth it? I hear this question asked almost daily, and to answer it, let’s look at some quick stats first.

• Only 39% of Americans have enough cash to cover a $1,000 emergency (Bankrate)
• 78% of Americans live paycheck to paycheck (CareerBuilder)
• 70% of Americans’ retirement plan is not to retire and keep working (Employee benefit Research Institute)
• 40% of Americans have saved less than $300 (GOBankingRates)
• 72% of Americans reported feeling stressed about money (APA)
• 70% of U.S. Households do not have a long-term financial plan (Gallup)

Ok, now the scary part is over. Take a deep breath. Everything is going to be ok.

As the stats above show, You are not alone if you feel stressed; you are actually in excellent company.

The good news, a sound financial plan can start solving all of those stats above. If having a financial plan can eliminate or even reduce stress in our lives, why wouldn’t we take action and start planning? To live a life that no one else is living, you need to do things no one else is doing. Planning is definitely not typical in our society; let’s get weird.

I believe that no one should live under the influence of financial stress. Stress eats away at your psyche and impacts everything you see and do. We have a way out. It’s called financial planning.

Not all financial plans are made equal. Let’s take a look at what you need to know about a financial plan that works for you today as well as in the future.

What is a financial plan?

When we hear the words “financial plan,” if we can get over the immediate stress that we feel at the thought of finances, we tend to think it is only for those with a lot of money. That couldn’t be further from the truth.

A great financial plan is not just a list of investment options for the rich but a living, breathing plan that grows and changes with you as you move through life. Think of it as a roadmap for navigating your financial journey.

A tremendous financial roadmap needs to be unique to you and reflect your goals, wants, individual situation, and specific needs that you have today while preparing you for your future. Every roadmap needs to have particular markers to compare where you are today to where you have been, note progress, and track how you are doing with your goals.

A genuinely great financial plan makes your finances personal and shows the options available to you. There is always a way forward, and this just lets you find it a little easier.

To have a complete holistic financial plan, you must have these categories in mind.

1) Financial Health — Time to get personal

The first step to any financial plan is to understand yourself, and you are not just the numbers that a spreadsheet can capture. When we diagnose our financial health, there are two categories of questions that need to be asked; personal and financial. Finances are 80% behavior and 20% knowledge, so any strategy that doesn’t first consider WHO you are is missing the mark. Your financial plan should start with a detailed understanding of these topics about you.

• Relationship to money
• Family make-up
• Interests and hobbies
• Fears and strengths
• What type of support system do you have in place

Once we have that foundation established, we can dive into your finances. We need to get a baseline of our financial situation, and the list below helps us develop that baseline.

• Income (Primary, side hustles)
• Cash Savings
• Assets (real estate, investments, business ownership)
• Debts
• Insurance
• Retirement (401k, IRA, 403b)

Once the baseline has been formed, we need to talk about your timeline. At the end of the day, financial planning is all about taking your dreams and turning them into a reality. To make your dreams a reality, we must take action.

Your goals and timeline will change as you move through your financial journey, but it is always important to have tangible goals to measure progress.

2) Financial Literacy

Knowledge is power. When we are talking about finances, that statement rings even more accurate. Part of your financial plan and the financial journey is to grow your understanding of finances.

The bottom line is most of us struggle with finances. We need to take ownership of the journey and start gaining knowledge. We do not need to be experts, but we must understand the financial concepts that affect our future.

Financial literacy includes things like managing money, credit vs. debits, retirement accounts, interest rates, debts, compounding interest, investment vehicles, and taxes. I know this can feel overwhelming, but it is well worth the time it takes to understand these things. Trust me. Your future self will thank you for the effort you put in.

This is where working with a financial planner, advisor, or wealth coach is extremely helpful for your growth. Life isn’t meant to be done alone, and finding someone you can trust to walk through your journey with you is so beneficial.

I know this journey might feel overwhelming, and check out this article here for more detailed information on Financial literacy 101.

3) Investing — You have options (pun intended)

Much like who you are, there is no cookie-cutter investment or portfolio that works for everyone in every situation. There are so many investment vehicles for you to participate in, but your investments should always reflect the overall goals laid in your financial plan. Where there is no vision, there is no future.

There are a few criteria that you should evaluate before investing any of your hard-earned money.

• Does the Risk vs. Reward make sense with my goals?
• What is the exit strategy?
• Do I understand the investment strategy and who executes it?
• Are there any fees associated with the investment?
• What is the timeline for the investment?
• What are the capital requirements? (How much money does it take to invest)

A financial planner or advisor can run your money through simulations to ensure that your investments are “on track.” They call this process stress-testing, and it is a great way to ensure your investment strategy makes sense.

Nothing is certain when it comes to investing, but here are a few general thoughts to keep in mind:

• Every investment has a unique language associated with it, don’t let that scare you off from learning more. Once you understand the language, the investment becomes more enjoyable, and you will no doubt be more successful.
• If it seems too good to be true, it probably is.
• Investing generates money, and gambling loses it. Get rich quick schemes are precisely that; schemes.
• “Compounding Interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t pays it.” Make compounding interest work for you, not against you.
• Risk vs. Reward, the more risk an investment has, the more potential reward. The goal should be to minimize risk while maximizing reward.

Take advantage of the experience of others and never stop educating yourself. Investing in you is the best investment you will ever make!.

4) Insurance

One thing is 100% certainty regarding your financial future. Life happens. Insurance protects you from the unexpected, so it does not throw you off your course when life throws a curveball your way.

There are several coverages available to you, such as life, disability, and long-term care, that all help protect your financial future and ensure your family is protected.

Unfortunately, it is extremely easy to overpay on insurance. Thankfully there are tools like Policy Genius that can help cut through the mess of selecting an insurance provider by allowing you to shop rates to ensure you get a good deal. My wife and I utilize policy genius, and we love it! It has saved us hundreds of dollars every month.

5) Taxes

There are few things worse than getting a letter from the IRS asking for more money. Not a place that is fun to be, for sure. Taxes take a significant portion of our earned income anyway we slice it, so shouldn’t we attempt to reduce the burden of taxes each year? I think so, but so often, it is overlooked.

When we think of taxes, we often view them as an unavoidable burden and are frustrated with the amount we pay out to Uncle Sam unless we are lucky enough to generate a refund. (Which isn’t really ideal either – we will talk about this later in another post.)

A financial plan should consider your tax burden so you can maximize how much of your money you get to keep today and in the future. There are many tax-advantaged strategies to minimize your tax burden, such as charitable donations to offset taxable income and maximize contributions to your IRA accounts.

Let’s take a retirement account, for example. Should you choose a traditional or Roth IRA? They both have excellent benefits for you and are great retirement options, but one primary way they defer is how they affect your taxes.

With a Roth IRA, whatever you deposit today is taxed today, but the money inside of the IRA goes tax-free as long as you are withdrawing after age 59½.

With a Traditional IRA, you receive a tax write-off today for whatever you invest, and then as your IRA grows, the money is taxed as you take it out.

So the decision is, do you want a tax break now with a Traditional IRA or a tax break later with a Roth IRA? You can also do conversions between the two to lower your taxable income drastically.

Ultimately your taxes should not dictate your financial plan, but they very much should be weighed and considered when choosing investments, retirement accounts and how they affect your overall goals.

Remember, tax evasion is illegal; tax is avoidance is smart.

6) Progress Monitoring

Your financial plan needs to have regular check-up periods for you to adjust as life changes or goals shift. Your financial plan is a living, breathing document with the sole purpose of maximizing your probability of achieving your goals.

By looking at this document regularly and having accountability built into your plan, you are will be able to assess what is working, what needs to be adjusted, and what steps need to be taken.

I know this is a lot but remember, no step is more important than the next one! You got this!

Disclosure:

This material has been prepared for informational purposes only and should not be used as investment, tax, legal, or accounting advice. All investing involves risk. Past performance is no guarantee of future results. Diversification does not ensure a profit or guarantee against a loss. You should consult your own tax, legal and accounting advisors.

The post What Is A Financial Plan And Do I Really Need One? appeared first on Affording Freedom.

Why are we constantly pursuing money? Do we want money for money’s sake? Does money guarantee happiness, and is the pursuit of money a goal worth pursuing? We put a lot of pressure on our ability to make money. Sure we need to make money to live and provide for our families; I’m not saying that’s not important. But somehow, along the way, we lose sight of ourselves. Money becomes more important than our values or, maybe more accurately, becomes our only value. Money at its core is only a tool, and a tool is only as effective as the person who’s holding it. Our behaviors dictate our actions, our thoughts dictate our identity, and our identity influences our perceptions of ourselves and the world around us.

Simply put, we can make all the money in the world, but if we don’t work on ourselves and have the proper perspective, it won’t mean anything. When you work on yourself, everything else comes into place. Investing in yourself is the best investment you’ll ever make. Having all the money in the world won’t provide happiness or freedom unless we can see money for what it is, a tool at our disposal. It is not the solution; we are the solution. It is time for you to change your perspective.

Key principles for changing your perspective

1) Let go of the illusion of control

We all constantly thirst for control, which can be highly useful in life; taking responsibility for our actions and being accountable is a great thing, but not accepting the reality of how much we can control leads to disaster. What we believe we can control directly impacts our identity. If we can control outcomes and the outcomes are “bad,” we have failed. In order to change our perspective, we need to understand what we can really control, which spoiler alert isn’t very much.

When we sit back and think about it, what do we actually control in our lives? Can we control how others perceive us or our actions? What about the weather, the stock market, whether we get the promotion, and our relationships? The reality is most of life’s outcomes are out of our control. So the question is, what do we control?

We only have direct control of how we choose to respond to a given situation and our conscious thoughts towards people or situations. Financial and personal peace begins with releasing what you don’t have control over and mastering what you do.

Let’s get practical. Let’s say you are going for a promotion at work. Are you in control of getting the promotion? Sure, you have influence over the promotion by how hard you work and your job performance, but ultimately you do not decide whether or not you get the promotion. So focusing on the promotion is wasting time on what you should be focusing on, bettering yourself. Anytime something we want is outside of our control, our answer should be to look inward, and finances are no exception. To get what we want, we must focus on what we can control.

2) Replacing Trying with Training

I think I use and hear the word try in some form at least 100 times a day. “I tried my best.” “I’ll try and do better.” “I am trying to stick to this diet, but it’s just so hard.”

According to the Merriam-webster dictionary, try is defined as “to make an effort to do something: to attempt to accomplish or complete something.” We need to completely get rid of the mindset of trying. Trying implies an action that is not in line with your identity. When we say try, we leave it up to willpower which will inevitably run out. Trying also is glued to a specific pass or fail outcome. (add more)

We don’t want to try on anything of importance.

Instead, we want to train. Training is defined as “to teach so as to make fit, qualified, or proficient: to make prepared.” Training is connected to your identity. If you try to run a marathon, the odds are you will fail. If you train for a marathon, you will succeed. Our mindset is critical, and we need to be people who train.

The same is true in finances. If you try to get out of debt and become financially free, the road will be difficult. If you train yourself to be a financially free person, you will inevitably become financially free. To learn more about what makes people financially truly free, check out this article on the seven characteristics that all financially independent people share.

3) Embrace and Accept rather than avoid Avoid and Deny

Self-awareness is critical to changing our perspective. If we don’t understand our typical patterns when handling difficult or stressful situations, we don’t give ourselves a chance to overcome them in the future. We like to think of ourselves as self-aware people, but our actions and thoughts often don’t support this narrative.

It is natural to avoid and deny problems, but unfortunately, problems thrive in the dark. When we face a difficult or stressful situation, we will typically avoid or deny it, and sometimes if we are really on top of our A-game, we do both. It feels more comfortable not facing the unknown head-on and challenging ourselves to endure. This is especially true in our financial lives. We are on the edge of bankruptcy, but we refuse to make any changes. We don’t want to take a look at our spending habits because it is too scary to face the mountain of debt.

The first step in dealing with any problem is accepting that the problem is there in the first place. The second thing we must do to change our perspective is to realize that the obstacle in front of us is the way forward. I love how Marcus Aurelius puts it, “The impediment to action advances action. What stands in the way becomes the way.”

Every obstacle provides us a unique opportunity to grow and improve ourselves and the world around us, or it can be another stumbling block that we can’t overcome. The major shift occurs when you realize that you get to choose which way you want to look at it, and that choice will dramatically affect every area of your life.

The post The Art of Savings — It’s All About Perspective appeared first on Affording Freedom.

What is the real purpose of accumulating wealth? Does wealth give us a sense of fulfillment or just a sense of security?

Imagine a perfect scenario where you don’t want for anything. You have all the money you need, and you lack nothing. What then is the money for? Once we hit financial stability, where we can cover all the necessary expenses of life, what do we do with it? If we are honest, most of us just think about ourselves, and it’s not entirely our fault. We are constantly bombarded with how to make more money, enhance our margins, profit more, get the pay raise, the list goes on. Our culture and society send us the message that we are the only ones that matter. How many self-help books do you see on a day-to-day basis? The self-help genre represents one of the world’s largest markets, but how many books do we see about helping others succeed?

Don’t get me wrong; there is nothing wrong with helping and focusing on improving yourself. It is a critical and essential thing that we all go on the journey of self-improvement. The danger of the self-improvement journey is that we get so focused on ourselves that we never look outward. When we forget money is just a tool to accomplish our goals and not the end all be all goal, things get messy. Being truly financially free and having mastery over money gives us the unique opportunity to provide others with value. In this article, we will talk about how to be effective in serving and helping others, why that is important for us, and how serving others is the key to a life of fulfillment.

Key Ideas:

• Looking outside yourself and providing value to others is the key to fulfillment
• Without trust, any effort to provide value to people will fall short of your intention.
• You can’t fake authenticity.
• You need to be trustworthy and have trustworthy people in your life.
• True fulfillment comes from living for more than yourself in all areas of your life.
• Happiness is a constantly fleeing emotion where fullfillment is sustainable.

Why Should We Care?

I have heard many “bumper sticker” theologies that boil down to treating others like you want to be treated. Sure this is nice, but if I am being honest, I often view this as a secondary marker or goal to my own selfish motivations. In other words, I will help someone if I am already taken care of or if it serves me. Living a life centered around yourself constantly requires more effort, stimulus, or the next thing to feel happy or even content. It is a draining way to live life because we deny our natural need for community. If we really want to break the chains that are holding us back, we need to understand the difference between happiness and fulfillment and our nature as social creatures.

Happiness is Fleeting. Fulfillment is Sustainable.

We all want to be happy, but the problem with happiness is it is an emotion and fleeting by nature. It changes with the wind. We can be happy one moment and angry in the next. When we chase happiness as the primary goal, it naturally makes us tired and exhausted and leaves a feeling of defeat in the long term.

Replacing the goal of happiness with the pursuit of fulfillment is where the magic happens. That is the secret sauce to a life of true freedom. Living for yourself can make you feel happy in the short term, but living for others creates fulfillment in the long run.

No matter your background or specific personality breakdown, giving and living for others has a great impact on us. We can see physiological benefits such as lower blood pressure, increased longevity, and improved mental health. (The Science Of Generosity) Human beings are social animals. We are designed to be in community with one another. When we live outside that framework, our fulfillment level goes down, and our anxiety and overall quality of life worsens.

How To Be Effective Helping People:

Unfortunately, just because we are social creatures does not mean living for others is a natural thing for us to do, let alone be effective at. In order to be effective in helping others, we need to cultivate trust. It may seem strange that to help someone, there needs to be an element of trust but let me prove it to you.

Let’s say I am at a restaurant with my wife and young daughter, and my daughter is crying as babies sometimes do. If my wife picks her up and attempts to comfort her, that is a positive gesture that my wife gives, and my daughter (River) and I can receive. River is settled and feels at ease, and I know River is in great hands with my wife.

What if instead of my wife picking her up and comforting her, a stranger comes and picks her up and tries to comfort her. Even if the intent of the stranger was to help a small child and some struggling parents, the gesture completely misses the mark because we don’t know the stranger. Since we don’t trust the stranger, their ability to help is limited.

Unfortunately, we can’t know everything. Trust allows us to make decisions and survive in the world without perfect information. Trust is at the center of the reasons for buying the things we buy, the friends we have, and our interactions with others. If we want to be effective in helping others, we need to master the skill of cultivating trust.

Elements of Trust:

Trust isn’t something you can simply check off a box and have with someone. Our intentions don’t affect whether someone trusts us, it’s something more instinctual. We can have “chemistry” with someone which is a form of trust and then we can immediately distrust another individual. Why? It’s because trust is a very human feeling that supersedes knowledge and experience. We all know people we consider reliable, yet we don’t trust them as far as we can throw them. Conversely, we have friends in our lives that may not appear to be trustworthy to the outside world but we trust them with our lives.

Trust fundamentally requires two things: generosity and authenticity. We like you because you are authentic which is the foundation of trust. We then ultimately trust you because we know who you are (authenticity) and we know you have our back (generous).

The bad news about authenticity is you can’t fake it. There is no shortcut to being more authentic. What’s funny about the world we live in today is, authentic is one of the easiest things to be while simultaneously being one of the rarest qualities we see. Feeling comfortable in your own skin gives others the confidence to do the same. That’s why we all crave authentic people in our lives even if we don’t necessarily agree with them.

The reason generosity is so important is twofold. First people don’t trust takers, they trust givers. The quickest way to build trust is to do something for someone and not expect anything in return. We describe these people as “having our backs”. The second is it cultivates community. When we live generously, we create a community that can lift others up. Generosity breeds generosity. Authenticity breeds authenticity. When you combine authenticity with generosity, I can promise you your life will feel infinitely more fulfilled and your relationships will thank you for it.

At the end of the day, you will value the relationships and people you helped more than the things you bought. It’s up to us to choose generosity daily.

The post How To Find Fulfillment In An Increasingly Distant World appeared first on Affording Freedom.