The term â€œAmerican Dreamâ€ conjures all sorts of images that involve fame, fortune, family, and overall happiness. What exactly is the American Dream, and how can you achieve it even during uncertain financial times?
Define Your Dream
Want to become the next mega rock star? If your dream focuses on something a little more realistic, youâ€™re not alone. One study found that 32 percent of people think the American Dream is about material success, while 27 percent think it’s about happiness. Happiness is a personal journey and not necessarily connected to material success. However, financial security is a powerful force for peace of mind.
Decide on your goals. Want to buy a house? Retire at a certain age? Pay for your kidsâ€™ education? All of the above? Define what you want to achieve, investigate how to achieve it, set deadlines, and make a plan that you can stick to.
Make a Budget
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A key factor in achieving the American Dream is knowing how to manage your money. An ideal budget includes everyday expenses like groceries and the cell phone bill, but it also includes money for savings. Draft a budget based on monthly income and expenses, holding yourself accountable to it.Â
Pay Off Debt
Some people call credit cards the worldâ€™s smallest shovels. How deep is your hole? One blog aptly states, â€œDebt costs money. It costs money in interest and in the potential savings lost. If youâ€™re reaching for your American Dream, then the first thing you need to do is focus on paying off debt.â€ Â How should you go about paying off your debts, though?
If you have more than one credit card with a balance, focus on paying off one at a time. Put your extra money toward that one account and only make the minimum payment on the other accounts. You can start with the account in which you owe the least amount of money, or you can choose to tackle the account with the highest interest rate first. However you choose to do it, one at a time is the key. Once you’re without debt, you can move your focus to investing in your future.
Make Short-Term Investments
The idea of investing money makes some people shudder. All the abbreviations, terms, percentages, and yields can drive the unwary up a wall. However, investing is a good idea for anyone reaching for the American Dream.
You can make short-term investments to help build up your savings and take you a step closer to achieving your long-term financial goals. CDs are among the best short-term investments. You can choose how long you want to put your money away; itâ€™s also a relatively secure type of investment. A Money Market account is another option, since you can have immediate access to your funds without paying a penalty.
Getting help from the pros is never a bad idea when it comes to investing. Click here for Fisher Investment videos on YouTube to learn more about how you can maximize your investments.Â
Buy a House
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You should also consider buying a home as soon as you’re able to. You donâ€™t want to work past your target retirement age because you still have a house to pay off. Also, if your home goes up in value over time, you can sell it and make money on the sale. Another bonus to buying a home is that it fits right in with the non-financial aspects of the American Dream â€” your own place where you feel comfortable.
Of course, with an unpredictable housing market, you should carefully consider all factors before you decide if buying a home is a good investment for you.
Look Ahead to Retirement
However you define the American Dream, it certainly doesn’t include working well past average retirement age because you canâ€™t afford to retire. Start thinking about retirement now, even if you think you’re too young even to consider it. The top ways to prepare for retirement include having a plan, investing in a retirement account, and not touching your retirement account once you start saving. Don’t be afraid to seek advice from professionals.Â
Donâ€™t let muddling through everyday life allow you to forget about your American Dream â€” for yourself, your family, and your bank account.