When we have to pay for mortgages, credit cards, student debt, the family holiday, and unforeseen circumstances such as medical bills, on top of international schooling, saving can seem daunting at the best of times, without a plan in place, it can seem even worse.
To help make the future easier to handle, we’ve compiled five tips for making sure you have a financial backup whenever you need it.
1. Know what’s coming in and going out
It’s important to understand the current state of affairs. Write down exactly how much you money and your family are bringing in versus how much money is going out each month.
2. Live to your means
In short, you should spend less than you earn. It may seem gloomy, but it’s certainly possible and can actually be much easier than you may think.
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3. Protect the future
Once you have a handle on how much money you can comfortably live on without overspending each month, it’s important to start thinking about investing in insurance and retirement plans with the money you are saving on unnecessary monthly spending.
4. Think cautiously about when to rent, and when to buy
If you plan on using something for a long time, then it is better to buy. Use cost analysis to understand whether you actually need that item, and how much money that item will cost you in the future. When considering renting or buying assets such as housing, think about your future mortgage and when you should start paying it off.
5. Invest responsibly
This isn’t something to do alone. The more you know about the financial instruments at your disposal, the better choices you’ll be able to make.
There are a plethora of products available to suit your individual needs. If a savings plan isn't for you, life insurance products can help your family if someone unexpectedly dies, and health insurance will help you with doctors’ bills.
If you spend your money wisely, invest it properly and responsibly, you can ensure you will have a financial backup on hand in case any unforeseen circumstances occur.