Credit / Investing

5 Things You Can Do For Your Future Self That Don’t Cost A Dime

By Wednesday, December 02, 2020

This article is sponsored by FICO.

Many of us have a solid idea of what we want our futures to look like. We see ourselves retiring by a certain age, having a career we’re proud of, living in our dream home, in our dream city, taking our families on trips, while staying active and healthy. But getting from A to B isn’t just a matter of waiting. Cultivating the financial future you want means taking intentional steps to get there. 

Thankfully, there are a lot of ways you can create the future you’ve always wanted  — and many of them are totally free. We’ve partnered with FICO to talk about some of our favorite ways to financially take care of your future self for $0. 

1. Actually start the healthy habits you see your future self being committed to, like reading or getting outside to clear your head 

Investing in your overall health as early and as regularly as possible is one of the best things you can do for your future self, financially and otherwise. In one of my favorite novels, What Alice Forgot by Liane Moriarty, a woman temporarily loses over a decade of her memories after a head injury. In one scene, she gets the urge to go for a run, and finds that she actually enjoys it and is in great shape — something she doesn’t remember ever being true about herself. I remember reading that and thinking, Wow, how rad would it be to just wake up one day and be in excellent physical shape without putting in any effort.

Unfortunately, that’s not how it works. But, barring health issues that might prevent you from doing so, there’s truly no reason to keep putting off the exercise habit you want to start. I love the idea of being active and still able to go on long hikes well into my 80s, but I know part of that requires maintaining active habits for my whole life leading up to that point. Thankfully, there are a lot of free ways to start being more active. I personally recommend checking out the Couch to 5K training app if you like the idea of running but have been too afraid to get started. It eases you in with a lot of running-walking intervals, and you can take it as slow as you like. There’s also a really helpful subreddit that is a great way to feel like you’re part of a larger community as you get more into jogging.

Additionally, some people are born readers and find it super easy to incorporate a reading habit into their everyday lives. I don’t think being a reader makes you morally superior, but there are a lot of long-term benefits to reading beyond simply expanding your depth of knowledge. Studies have shown that reading more is connected with higher levels of empathy for others. Also, people who regularly engage their brains through activities like reading or puzzles could be 2.5 times less likely to develop Alzheimer’s disease than those who choose less stimulating activities. And let’s not forget that the library is one of our best resources for free entertainment — and thanks to e-content apps like Libby, libraries are more accessible than ever.

And on a personal note, reading is one of my favorite ways to connect with other people. My online book club has been one of my most reliable sources of digital social interaction amid the pandemic, and I love being a part of a community of readers. Check out this article if you want to start a reading habit. (My best tip: read books you’re actually interested in. There’s no shame in loving romance!)

2. Stay on top of your FICO® Score.

We here at TFD are not against using credit — in fact, when handled responsibly, it can play a crucial role in reaching your financial goals. And a solid credit score means you’ll be setting yourself up for long-term financial success, from access to better interest rates on your credit cards to a better chance to be approved for a mortgage.

And did you know that 90% of top lenders rely on FICO® Scores in their lending decisions? It doesn’t matter what your long-term financial goals are — chances are, you’ll need to monitor your FICO® Score in order to get there. Luckily, it’s easier than ever to access your FICO® Score for free. Click here to see if your bank is one of the hundreds of lenders that allow customers to check their FICO® Score for free.

Having a good FICO® Score tells lenders that you’re a reliable borrower and helps give you more options. This has made the lending process faster and fairer, helping millions of people get access to the credit they deserve. And now more than ever, FICO believes in helping empower communities by way of financial education and is committed to providing consumers with tools to better understand their financial health. When it comes to credit, don’t panic — visit ScoreABetterFuture.com to get access to free educational events on credit scores and the financial tools you need to help you achieve your money and life goals. 

3. Set up automatic savings deposits. 

When it comes to saving for your future self, the hardest hurdle is often letting go of instant gratification. You’re setting money aside so your future self has access to it, but your current self has to kind of forget it ever existed in order for you to stay on track. Automating your savings is one of the most seamless ways to make sure you meet your savings goals. It ensures that you never forget to make a deposit, so you always stay on track towards your longer-term goals. (And this goes for money you’re saving and money you’re investing — it’s definitely a good idea to automate your deposits into your retirement account.)

And make sure you set up your automatic transfers to your savings so they get taken out of your account right after you get paid (with a day or two as a buffer, just to be safe). This is the concept of “paying yourself first” — making sure you put money into savings before you spend it on anything else. And when you put your budget together, I personally recommend accounting for your monthly savings separately from the rest of your spending. If you only see your post-savings income as “discretionary spending,” you trick yourself into thinking that the money you save is off-limits — which is what you want! To get an idea of how to set up your budget spreadsheet, check out this article

4. Research your retirement account options, even if you’re not ready to commit to one.

As the saying goes, the best time to start investing is yesterday. (And if you need an explanation of why that is, check out this video from TFD’s resident investing expert Amanda Holden.) Not everyone is on the same timeline, and you don’t need to beat yourself up over waiting “too long” to start investing. But it is true that starting as soon as possible is one of the best things you can do for your future self. 

You might have access to a 401k or 403b through your employer, in which case we recommend starting there. If your employer offers matching as an employee benefit, that’s even better, because it means they’ll “match” your contributions up to a certain percentage — AKA free money for your future self. Other retirement options include a Traditional IRA and a Roth IRA, which differ in regards to their tax structure. Before deciding on what type of account to open, look into all of your options. 

5. Try cutting out one “extra” expense for a month to see if you can live without it.

I’m obsessed with this concept called the endowment effect: the idea that “people assign more value to things they own than those they don’t — even if those items are actually identical or don’t have any inherent value.” So if you get used to “owning” something, you start to feel like it’s a necessity, even if it’s a complete luxury.

This can apply to anything extra — your gym membership, subscriptions, meal kit delivery services, etc. Try cutting out just one “extra” recurring expense to save money, and see if you actually miss it. You likely will at first, especially if it was something that made your life more convenient. But when you adjust to not having it, you may realize your life is actually just fine without it, and you’ll have cut down your recurring expenses.

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Remember, these are just some of the ways you can start working towards the future you want. And if you want to get started improving your credit to make sure you can reach your goals, check out ScoreABetterFuture.com today.

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