The only sure way to lead a stress-free life is to save money. It could as little as a couple of hundred dollars every month or a couple of thousand but by the time you throw in the towel at work, you would have amassed a tidy sum enough to get you through life.
Most of us are in debt with the soaring cost of utilities, food, gas, interest rates in mortgage. At the beginning of a career, saving a set amount every month is not always possible but it's more than possible to put away a few dollars. As promotions are received, lifestyles are altered to spend less and disposable income is increased, the amount that goes into savings adds up to a lot.
Once you hit 30, it's time to seriously consider planning for retirement. Experts advice doing so from the age of 20 so that you don't have to stash away more money every month to build substantial savings enough to cater to your lifestyle once you hit 60 years plus.
The first step to planning is to set a budget for expenses. This will include primary and necessary expenses like transport cost, electricity, water, food, mortgage and other debts. It's tempting to include the monthly spa treatment or tickets to the theatre but do you really need them? You don't and with the money saved on needless expense, you'll be able to put away over a $1,000 a year.
The next step is to open a retirement account if you don't already have one. A percentage of income is directly debited from your income and stashed in the account which can't be touched for a certain period. According to experts, these compulsory pension accounts have significantly increased retirement incomes by essentially letting account holders pay themselves.
If children are in your future, now's the time to open a college savings plan. The cost of education is extremely high and is expected to remain high in the next 15 years. There's no time to lose. If you don't plan to have children, put away money to purchase a house you plan to live in during retirement. If you start now, it'll be easier to seek a loan and pay it back with no stress.
Purchase term insurance for life coverage which a cheap protection plan that can pay off mortgage and other debts on your demise. Imagine having to force your children to pay heavy debts if you pass away. It's a risk not worth taking especially in today's expensive world.
Shop wisely for products you want or need for the next five years. Despite pay cuts during the recession, a lot of the consumer products that were expensive a few years back have now become cheap. Electronics is one with cellphones and entertainment systems quite affordable. Of course, most are luxury items but if there's something that's priced reasonably but may become expensive in a year or two, now's the time to shop.
It may seem cruel but if you have kids, cut them off by the time they hit 25. As a parent you obviously feel a need to help out but you'll find your retirement plan suffering before you know it. Kids have more years to pay off their mortgage and other debts but you don't. Besides, statistics show that children forced to fend for themselves in their early 20s become bigger lifetime earners.
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Financial planning is very important and it helps to set long and short-term life goals. Having a plan in place makes it easier to take financial decisions and stay on track to meet your goals. Seagrims offers financial advice that is designed to meet the needs of their clients. To learn more about financial planning, visit this website seagrims.com.au.
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