You may have your finances under control now, which is great, but life is a funny old thing. One minute everything can be going your way, the next minute you seem to be facing problem after problem. In times like this, it will be a great comfort to know that you were prepared and able to cope with all that life throws at you. With that in mind, here are three ways in which you can secure your financial future against anything that life throws at you.
In this day and age, everyone has debt. It’s just a fact. Credit cards, cars, mortgages, personal loans. However, the best way to future-proof your finances is to eradicate your debt as bad as possible. You may well be aware that not all debt is bad debt, but it is still money that you owe to someone else, and you will want to pay it off as quickly as possible for peace of mind. If you have a number of small debts to various places, then this website could hold some useful information on how to pay that off quickly. If you still have a mortgage you are paying off; you should make that a priority too. The security of being the sole owner of your home not only releases a huge financial burden but allows you to live secure in the knowledge that no matter what, you have a home. You should put as much money as possible towards your mortgage repayments whilst still keeping on top of other bills and your savings. Which brings us to the next point.
Obviously, you will be saving for your retirement and your next big holiday and many other things. But the most important thing you should save for is your emergency fund. You should attempt to have at least enough money to cover all your expenses for three months, however, having more is never going to hurt. This way, if anything untoward happened, and you weren’t able to work, you would have enough money to keep the wolves from the door until you were able to head back to work or get a new job.
Live Below Your Means
This one is easier said than done, but there are plenty of practical ways to save money. As our earnings increase, so do our spending habits. Nearly half of all people earning six figures in the US have less than $1000 in savings, and many report that they regularly have very little money left at the end of the month either. Just because you have money in the bank, doesn’t mean you should spend it. By taking a step away from the materialistic world in which we live, you stand to keep a lot more of your money. Do you really need a 50” TV or will a simple 36” TB be plenty big enough for your home? Do you need a brand new car which will lose nearly half its value in three years, or can you make do with a slightly older model? By avoiding the ‘bigger and better’ mentality, you stand to save yourself a considerable amount of money.
There you have it three easy ways to future-proof your finances and keep you stable, no matter what life throws your way.