Be honest – how often do you think about your financial future? It doesn’t matter whether you are in your teens, twenties, thirties or forties, there are still many years of work and earning potential ahead of you. And if you are like many people around the country, you probably think you will be OK by the time you retire. You might have a nice little 401(k) set up with your current employer, and perhaps a little bit of savings set aside for a rainy day. But is it enough?
*This is a collaborative post.
…The chances are, probably not. According to research from last year, almost six out of every ten Americans have less than $1,000 in the bank. And let’s face it – that’s not a lot of money. What happens if your car breaks down and you need to replace it to get to work? What happens if the company you are employed by suddenly takes a downturn and lets you go? And what if someone in your family ends up getting seriously ill, with a condition not covered by your health insurance?
No matter how careful you think you are with money, the reality for a lot more than half the population is that we are ill-prepared for an emergency. With this in mind, let’s do something about it right now, and make today the day you secure your financial future. Here are a few things to consider.
First of all, even if you are comfortable with your debt level right now, there’s no guarantee you will be in the future. And if you get into a sticky financial situation, debts get expensive very quickly – and you could be looking at bankruptcy, or worse. Get it sorted sooner rather than later if you want to stabilize your finances.
Financial experts say that you should have around six months-worth of income set aside in an emergency fund. It sounds a lot, right? Well, yes – but for good reason. If you were to lose your job tomorrow, it gives you a big financial cushion to soften the blow, and plenty of time to find some new work. And if you do get hit by an expensive disaster, your emergency fund can cover it without it affecting your usual budget.
This is a huge topic, of course. Health insurance is a must-have and it’s essential that you have the right coverage. The trouble is, few Americans do – only 4 percent of people in this country are able to define what they would have to pay for medical services under their personal health insurance plans. But insure other areas of your life, too. As Insurestat points out, things like disability insurance may not seem necessary, but it only takes an accident at work to find out that it is essential. Insurance for natural disasters is important, too, especially if you live in an area where earthquakes, floods and tornadoes are not uncommon.
Finally, make sure you take care of everyone you love, even when you’re not around anymore. Take out some life insurance. Create some plans for your estate. Take out some funeral cover. And make sure you are reviewing all of your financial life every 2-3 years to make sure your children or partner will never have to fit the bill once you depart. Good luck!