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The best kind of company to work for is one that offers a 401(k) and that matches your contributions up to a certain percentage. The name for your company’s contribution is free money because that's exactly what it is. If your new employer doesn't match your contribution to your 401(k), you should sign up as it still represents a good way to save money and see it compound over time. In a worst-case scenario – where your employer doesn't offer any kind of retirement savings plan you will need to open your own traditional or Roth IRA. The easiest way to add money to it is through automatic deposits from your checking account. Getting back to the 40/20/30 system for budgeting, you should shoot for saving 20% of your net income. If that doesn't seem realistic – given your current financial state of affairs – try for at least 10% with the goal of hitting 20% as soon as you can.
How to know you’ve achieved financial stability
How can you know that you've achieved financial stability? There are certain signs that will tell you when you achieve this goal. For one thing you must be consistently spending less than you earn so that you have a surplus of money, which gives you more control over your finances. Second, you must not be accumulating any new debt but paying down the ones you have. You should be able to make at least the minimum payments on your debts and something more.
Another sign that you’ve achieved financial stability is if you're no longer relying on gifts or loans from your family. This means you're making it on your own with just your income and expenses. If you're working on building your future through investments and savings, this is an important sign that you're achieving financial stability.
Another important sign is if you're moving forward steadily in your career. You also need to have health insurance and be taking care of yourself. Finally, do you pay your credit card balances in full every month? Credit cards can be helpful tools when you’ve achieved financial stability. This is because they allow you to time shift your spending just as your DVR allows you to time shift your favorite programs. Some credit cards allow you to collect cash back while others offer points that can be used for free travel. But credit cards are helpful tools only if you pay your balance in full every month. Otherwise, they can be a slippery slope to piling on more debt.