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This article was updated on September 11, 2023
By Leslie L. Megyeri
Research by Ashley Whillans of Harvard Business School found that money can buy happiness, including more free time to do things you want and like to do. Achieving happiness is more likely if you spend money for experiences like going to a play or concert instead of buying more clothes, restaurant meals or gifts. So, what are some of the ways you could have more money during your retirement years?
How do I improve my financial status?
First, a major way to improve your financial well-being is to view your house not as an investment but as an expense. Therefore, one should buy a house which is the least expensive for your needs and invest the remainder in dividend paying stocks. Many of us have large homes in which relatives and friends can stay while visiting, but how many times does that occur in a given year? Wouldn’t it be less expensive to put them up in a nearby hotel and take them to a nice restaurant?
Secondly, debt is a killer to one’s financial independence. Try to pay off your debts as much and as soon as possible. Better yet, do not borrow and run up credit card debt. Pay with cash whenever you can instead of with credit cards. Paying with cash or check allows you to realize that you are spending money instead of flipping out your credit card to make a payment and being shocked at the end of the month when the statement arrives.
Thirdly, resist falling for sales which are usually too good to benefit you in the long run. Instant gratification may be enticing but you pay for it dearly in the long run especially if you pay on credit. One rule of thumb is to remember that you may pay for such items two or three times its stated price when you pay on credit due to interest rates.
Fourth, if you have debt, try to refinance your mortgage and auto loans because interest rates are extremely low right now. Once you refinance, make an effort to pay these debts off as soon as possible if you are able.
Fifth, decide to set up a “no spend” challenge for a limited time for yourself and see whether that helps you to achieve financial independence. Examine whether or not your level of happiness changes during the “no spend” time. You may be pleasantly surprised that incurring debt is not that much fun.
Where do you find money to achieve financial independence?
Sell items which you have accumulated over the years and which you no longer want, use or consider valuable. Yard sales or consignment stores are the most obvious, or if you are adventurous, use the Facebook market, Postmark and Craigslist to sell your belongings.
If you feel lucky, you can look for lost money in MissingMoney.com to search for unclaimed property. Each state has a website to look for such property, especially unclaimed life insurance policies. Obviously, some paperwork is involved to retrieve the money, but it is worth the trouble.
You also don’t have to buy a new car every year. Of course, you want a reliable car in proper working order, but as your car gets older, you should only take liability instead of collision insurance. Also, take the highest deductible so as to reduce your premium payments.
To maintain your financial independence, keep your finances as simple as possible. Stay away from credit cards and do not waste your time figuring out how to earn credit card reward points. You are playing against the professionals and the house wins every time.
If you have additional time on your hands, you may want to get a part-time job to earn extra cash. The choices are unlimited. Some find pet-sitting, tutoring, house sitting or working at a golf course to be both entertaining and profitable. If you watch Netflix, get involved in online surveys, Opinion Outpost, Global Test Market and others that pay you for your feedback.
I believe money can buy happiness, as crass as that sounds. People with money live longer and have more fun in life. You just have to maintain financial discipline, do not shop until you drop and don’t believe for a minute the grandchildren will love you more if you treat them to an annual week at Disneyworld. Just ask others what they remember most about their grandparents and most of them will tell you that it is time spent doing the simplest and perhaps the cheapest activities imaginable—fishing, swimming or camping.
In this era of uncertainty with the coronavirus, financial independence will provide you with much comfort in order to survive this pandemic. Since you have resources, you can help others less fortunate and take solace in the fact that you and your loved ones are as protected as possible. Your enhanced financial independence will ensure that you will not deplete your resources as you age.