Four individuals holding an American flag

Stars, stripes and savings: Ways to achieve financial freedom

Jul 3, 2021
Empower Insights

Get out of the way, apple pie.

You’ve got company.

While the delicious dessert has been a staple in this country for centuries, especially on the Fourth of July, it appears saving more and pursuing “financial freedom” may be catching up in fame and tradition. In fact, as Empower Retirement insight shows, 70% of Americans are putting more money away in 2021 to reach their long-term goals. Others are taking major steps to trim their spending and control their income.1,2

So, what exactly is “financial freedom” and what does it mean? To find out, we asked Americans to describe the key factors that are driving their overall financial well-being. Their responses varied, of course, but the vast majority agreed financial freedom begins with having stability now and security later.3

In honor of Independence Day, here’s a star-spangled list of ways you can celebrate your own success and gain financial freedom:

PAY ON TIME EVERY TIME

When it comes to feeling free with your finances and obligations, don’t wait to make your monthly payments. After all, 75% of Americans believe covering their household costs in full can lead to better financial health.* If you’re struggling to stay on track, you may want to use a budgeting tool to get organized and establish a productive pattern. There are plenty of mobile applications and online resources that can help you link bank accounts, categorize your bills and set up a system that works best for you.

EXPECT THE UNEXPECTED

No matter your current age or career stage, you’re probably well aware that life doesn’t always go as planned. That’s why over 70% of Americans claim building an emergency fund is an essential element to maintaining a strong savings strategy.* Remember, experts recommend socking away three to six months’ worth of expenses to be safe in case an unforeseen expense, like a car repair, crops up.

If you can, allocate a portion of your stimulus check or tax return to get your just-in-case stash of cash off the ground. Then add to it on a regular basis so you’re ready for any pricey surprises that come your way.

A 2021 penny is held by two fingers with American flag super-imposed

SCORE BIG

The higher, the happier.

While an exceptional credit score can help you lock in a lower interest rate when trying to purchase a big-ticket item such as a vehicle, an outstanding mark can also help you improve your financial mood today. To be sure, 70% of Americans think possessing a good credit score would enhance their savings standing.*

How can you take action? Check your status! You’re entitled to one free credit report a year from each bureau. If you notice a negative entry that’s hurting your total, see if you can file a dispute to resolve the issue. Even having one item removed can dramatically boost your result — and maybe your morale, too.

DESTROY YOUR DEBT

You can’t spell “freedom” with “free” — and being debt-free in the land of the free is often a main objective for many adults. In all, 69% of Americans associate eliminating debt with strengthening their financial footing.* If you need help managing your different loans, consider implementing the snowball method. It’s a one-by-one process that can help you slowly tackle your debt until you’re out of the red.

INVEST IN YOUR FUTURE

On average, most individuals in the U.S. call it quits and start their next adventure when they turn 64 years old.3 While retirement age is certainly important, people also value the independence to hang it up on their own terms. Nearly 70% of Americans, for that matter, state having the ability to retire when they want to is critical to balancing their priorities today and becoming financially stable tomorrow.*

Do you have dreams of retiring sooner or working longer? Regardless of your situation, it’s up to you to keep growing your retirement income. If you’re enrolled in your workplace program, assess all the benefits available to you. Signing up for automatic deferral increases, meeting your employer match and designating catch-up contributions (if you’re eligible) are potential features that can help you pad your nest egg

CREATE CONSISTENCY

People can be creatures of habit when it comes to performing many ordinary tasks. From eating to cleaning to sleeping, some Americans love a normal routine.4 They view their financial picture the same way, it seems, as 69% say sticking to a consistent savings approach is vital to generating financial confidence.*

What can you do to develop a rewarding rhythm? Set it and forget it. From automatically earmarking a specific amount from each paycheck for travel to annually escalating your 401(k) contribution percentage by 1% every January, there are several easy exercises you can adopt to put a formal plan in place. 

* Data from joint research project provided by Empower and Personal Capital in “The Journey Toward Financial Freedom: How Americans define financial well-being, how they get there and what stands in their way.”

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Get started on your path to financial freedom with an Empower Investment Account

1 Empower Institute and Personal Capital, “Back to (Financial) Basics,” January 2021.

2 Empower Financial Wellness Survey, April 2021.

3 Yahoo Finance, “The Average Retirement Age in Every State,” June 2021.

4 NPR, Hidden Brain podcast, ”Creatures Of Habit: How Habits Shape Who We Are — And Who We Become,” December 2019.

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