Financial independence is all about having enough income or wealth to pay for your expenses without needing any additional assistance.
By choosing the right banking features, you can more easily get on the path that leads to financial independence.
1. Savings Accounts
The two main types of bank accounts are checking accounts and savings accounts. Whereas the former is used to easily and immediately access your money, the latter enables you to save money for the future.
Of course, the more you save, the easier it will be to achieve financial independence later down the line.
Savings accounts do not usually charge a fee and they will pay interest on the money that you keep there. So, by using a savings account wisely, you can soon build up substantial savings.
2. High Yield Bank Accounts
Speaking of interest, you should consider a high-yield bank account for your checking account.
When you have no account fees, no-fee overdraft coverage, cash back options, and the opportunity to earn an annual percentage yield, you can soon build up your money. You can then transfer more cash to your savings account and earn more interest.
3. Automatic Saving
When you use automated features, you can soon save more money to help you travel further down the path to financial independence.
For example, direct deposits can direct your money to several different bank accounts at once, which enables you to grow your savings while also sending money to your checking account.
When utilizing the automatic saving option, you should consider using an income percentage, instead of an actual number. That way, your contributions to your savings account will automatically increase as your income increases.
Another option is automated transfers, which are offered by some financial institutions. Automated transfers schedule recurring transfers from your checking account to your savings accounts to ensure you are continually contributing to your future financial independence.
While there are several ways to grow your finances, automatic saving is one option you will want to consider.
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4. Credit Cards
By establishing good credit and building up your credit, the goal of achieving long-term financial independence becomes easier.
With a good credit score, you can do things such as secure lower interest rates on financing like mortgages and car loans and be approved for higher credit and loan amounts. In turn, it will be much easier to save money and work towards your financially independent goals.
There are several ways of building your credit. One of the first steps you should take is to secure a credit card.
Although you have to pay a certain amount of interest on credit cards, by always paying off your credit cards in a timely fashion, you can significantly increase your credit score. In turn, that means you can boost your savings.
You may want to consider getting a secured credit card, which works by paying a cash deposit upfront to guarantee your line of credit. By using a secured credit card wisely, your credit score will improve over time.
5. Professional Financial Advice
Powerful banking features are not limited to tangible products. One of the best features that can help you to achieve your long-term goal of financial independence is that of professional guidance.
So, choose a bank that is able to provide you with sound and independent financial advice. You could then pursue things like stock investments to help you become financially independent.
The Takeaway
While the above options are incredibly useful for helping you to achieve financial independence, if you are serious about being financially independent, you should spend time setting your life and financial goals, creating a budget, and considering different investment opportunities.
