Have you ever taken a moment to think about your future? Most people do, but what about your financial future. In our today’s economy, not many things are guaranteed. Whether you think about big things like your job, retirement, investments, or everyday things such as the price of gas, food, etc, it can become overwhelming.
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Think Long Term
Most people think about their immediate future but not long-term. As stable as you think things may be, life has a way of throwing curve balls. What if you lose your job, you become disabled, you and your husband get a divorce and he was the primary source of income, what about when you are ready to draw retirement, only to find out that it is non-existent? These scenarios may soundextreme but they are much more of a reality than you may think.
I have a relative who was very active, never been hospitalized, and had no reason for alarm. She worked full-time at a job that she loved and made enough money to cover her expenses and save at the same time. The problem was that she had poor saving habits. She is an example of someone who did not secure her financial future. After 15 years on her job, she had a freak accident and lost the ability to walk. In the process, she eventually lost her job (it required extensive walking), her health benefits, and she had to live off of disability which was less than half of her regular income. Since her savings account was minimal she had nothing to fall back on. I think that if she had beenbetter educated on ways to secure her financial future, money would be the least of her worries.
How to Prepare for the Worst
I plan to share with you a few ways to secure your financial future so that you can be prepared for the worst. To begin with, every employed individual should have an interest-bearing savings account. The interest rate won’t be very high but the important thing is that money is accumulating over time. The only time that this money should be touched is in an extreme emergency. Another great thing to have is some sort of retirement account. There are several options out there and I would suggest that you do your research before you choose. I personally would go with a Roth IRA account, with this account after five years you have the option to start using retirement money at the age of 59½.
Another great way to plan ahead is to find out if your job offers long/short term disability. Usually this is offered whenever you renew your insurance plan. There is a small fee that is taken out of your check each month, usually somewhere in the range of $3-$6 a month. This is a smart option because if you become disabled (whether temporarily or permanent), and you have exhausted your sick leave, you will continue to receive money for an extended period oftime. It’s definitely a small price to pay for a bigger issue down the road.
Lastly, and I can’t stress this enough, work on eliminating ALL debts, including car and house payments. Each month, if you are capable, pay a little extra on your bills. You wouldn’t believe how quickly you will see your debt begin to diminish. Debt will be one less thing on your mind if you run into any “life emergencies”.
Your financial future is just as important as your other obligations. Take time to plan now, it will greatly benefit you down the line.
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SB @ One Cent At A Time
April 8, 2012 at 3:37 pm (UTC 0) Link to this comment
The best way to prepare for the worst is to have insurance. All sorts of.
Joe @ Retire By 40
June 12, 2012 at 9:14 pm (UTC 0) Link to this comment
I recommend short term and long term disability insurance too. You never know what can happen and it’s not all that expensive.
20's Finances
June 13, 2012 at 2:07 pm (UTC 0) Link to this comment
I enjoyed your point about getting rid of all debts. Couldn’t agree more. I hope to own my own home by my full retirement age so that my expenses can be that much less in retirement.
Nick
June 15, 2012 at 3:54 pm (UTC 0) Link to this comment
It’s pretty funny – work provides great disability insurance and we’ve planned a rough budget for if we ended up going on disability. But once we got life insurance it decreased our stress level by about 50%. I know my family is covered if I’m disabled or dead… now I just need to figure out what good I am healthy and alive…
JW @ AllThingsFinance
June 16, 2012 at 6:15 pm (UTC 0) Link to this comment
I love retirement account contributions because you forget about the money after a while. Whether it’s an employer sponsored plan like a 401(k) or a self directed IRA, you can setup automatic, reoccurring deposits. After a few months of contributions, you’ll learn to live with your new paycheck total.
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