The situation we find ourselves in today underlines just how unpredictable life can be.
With millions of people staying at home for the foreseeable future, many of us will have learned a lesson. It’s not always possible to prepare for every eventuality, but planning can be incredibly beneficial when it comes to managing your money. If you’re looking to future-proof your finances, here are some steps you can take now.
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Checking Statements and Balances
In this day and age, it’s simpler and quicker than ever before to check your balance, but it’s also easier to lose track of spending. Most of us don’t use cash or cheques anymore, and we use direct debits and contactless payments to pay for products and services.
If you’re not used to checking your statements or looking through transactions regularly, now is the time to pay more attention to the information in front of you.
You can use Internet banking and apps to monitor spending, identify irregularities, and see how much money you have available to spend or save. If you can get used to being proactive with money management, this will help you save more and reduce the risk of overspending and getting into debt in the future.
We all hope that we will live to a grand old age, but the truth is that it is never too early to make a will. Nobody knows what is going to happen tomorrow, let alone in the next 10, 20, or 30 years. Making a will and seeking advice from attorneys like those at Mile High Estate Planning can help you protect your assets and ensure that your partner, children, or family members benefit if you pass away.
Your will contains instructions, and you can specify who you want to inherit your assets when you die. It’s also wise to look into critical illness cover and life insurance policies. If you fall ill, critical illness cover can help to cover the cost of medical care and lost earnings. If you have a life insurance policy, you can enjoy peace of mind that your family will have access to funds after you die.
Saving for emergencies
It is more apparent than ever before that bolts out of the blue can leave us facing financial distress or even ruin. Life has a nasty habit of throwing out curveballs, and this is why it’s helpful to have an emergency savings pot.
Even if you have a secure job and a good salary, you might find yourself in a situation where work dries up, or you lose your position in the future. You may also need to pay for operation after an accident, or a hurricane might damage your home. It’s always wise to have a plan B. If you save money every month, you’ll have a nest-egg to rely on if you need cash quickly or your income decreases.
Protecting Your Income
The vast majority of people rely on a monthly or weekly income to keep them ticking over. If you don’t have savings, and you were to lose your job or your business, how would you cope? If you’re employed, you may have access to initiatives and legal rights that would provide a payout, for example, if you were made redundant. If you are self-employed, the risks are higher.
If clients canceled, or you fell ill or sustained an injury that meant that you couldn’t work, would you be protected?
If the answer is no, it’s wise to explore financial products that you could invest in to secure your finances. Income protection insurance may be an option that suits your circumstances. It’s also beneficial to check your current health insurance policy and to consider taking out critical illness cover. If you’re a business owner, and you’re not sure which plans are best for you or what kinds of steps you can take to shield your earnings, don’t hesitate to see a financial adviser. You can learn more about the available products, and your adviser can also make recommendations based on your requirements.
Taking out insurance policies for your home and family
Running a household, paying for medical treatment, keeping a car on the road, and caring for children and pets don’t come cheap. In fact, there is a real risk of incurring substantial costs that may appear unexpectedly. If your child needs surgery, your car breaks down, your pet is injured, or your home is broken into, these kinds of scenarios can be costly.
You might find yourself in a situation where you have to try and find hundreds, even thousands of dollars. Taking out insurance policies is a means of reducing risks and ensuring that you have access to financial assistance if the need arises. Insurance can be expensive, but it’s worth having. To lower the cost of insurance, shop around for the best deals, compare prices, and always check fees before renewing policies.
Investing Your Money
One of the best ways to future-proof your finances is to invest wisely. Investing can be risky, but if you take calculated risks, they can pay off. Real estate is a popular option. There will always be a demand for housing, but the key lies in choosing a location and a property that people will want to buy.
Research areas carefully, establish an ideal buyer persona, and keep a very close eye on the market. If you’re looking to sell, avoid taking the plunge if the economy is shrinking, demand has decreased, and people are fearful of buying property. It’s best to wait for signs of recovery to emerge and to sell when the market has bounced back.
The Bottom Line
We all want to look forward to a stable, bright future. You might feel like there’s no point in looking too far ahead now, but it’s never too early to start making plans. Keep an eye on your finances, invest in insurance, make a will, and try and ensure you have access to emergency funds.