Financial security refers to the peace of mind of having sufficient income to cover your expenses while enjoying a quality way of life. It is not worrying about retirement or emergencies since you have enough savings to cover them. Working toward achieving financial security ain’t that easy, but it’s plausible, especially when you start as early as possible.
And by saying “early”, we mean “today.”
To obtain financial security in the future, here 12 little things you should do today while you’re young.
Living within your means
1. Don’t need it? Don’t buy it.
“Just because you can afford it doesn’t mean you should buy it,” a wise reminder from American author and financial advisor Suze Orman. Practice this mantra while you’re young. We’re not suggesting you succumb to self-deprivation – we’re talking about putting emphasis on things that truly matter rather than splurging on extravagant things you can live without. If possible, find other ways to be happy without throwing money.
2. Ditch your car and ride public transport
Fuel and car maintenance costs are hindrances to frugal living. Not to mention those unexpected mishaps that force you to break your piggy banks for repairs and compensation. Lessen these car-related costs (and exercise too) by riding cheap public transportation every once in a while.
3. Keep your home modest
Who wouldn’t want to relax in a large, grandiose mansion after decades of hard labor? That’s a great aspiration. However, if the process of obtaining the house of your dreams puts you in a deep financial crisis and kills that little amount of contentment and happiness in you, then the luxurious home isn’t worth the investment.
Budgeting your income
4. Plan a monthly budget
To make sure your expenses aren’t exceeding your income, preparing and working within a budget is essential. The rule of thumb is to keep your expenses as low as possible. Knowing where your money goes allows you to make small, manageable changes in your everyday expenses which can have a big impact on your financial situation.
5. Learn self-control
Defeat the tempting whispers of consumerism. Limit your mall visits. If you have to go to the mall, never enter without having a specific intention to avoid impulse buying. Avoid spending too much on simple hangouts. Minimize your intake of advertisements as well. Use cash or debit instead of credit cards which have huge interest rates.
6. Always aim for discounts and free stuff
Every time you shop, always hunt for a better deal. Compare prices. Wait for bargains. Collect coupons. Stock up on free hotel shower caps, soaps, and shampoos to use at home. Every penny saved, no matter how small the value, can help with working within your budget.
7. Avoid paying for short-term convenience
Think about all the expenses you paid for valet parking, cab fares, restaurant meals, expensive coffee, and shipping fees. They may be little but they do hurt your savings over time. Practice time management to refrain from relying on these convenient yet costly options.
Guarding your health
8. Quit your vices
The more you consume vices, like smoking, drinking, and gambling, the more they consume you. Besides blowing your money, vices also threaten your health, and you’re likely to deal with tons of expenses for your medical problems. Individuals with vices also pay higher insurance premiums for they are considered “high-risk” clients.
Not to scare you but, if you don’t quit today, you and your family will suffer the dreadful consequences in the future, medically and financially.
9. Get health and life insurance
Eating healthy foods, exercising, steering clear of vices, and driving defensively all help you guard your health. However, there are potential threats we cannot control, like inherited diseases and accidents. This is where paying for health and life insurance comes in handy.
Health insurance covers your medical care expenses and safeguards your savings after getting ill or injured. Life insurance, on the other hand, protects the people who are financially dependent on you should you cease living. Don’t wait another day to apply for these insurance policies. Find an insurance adviser today while you’re young.
Guarding your wealth
10. Insure your properties
Aside from health, long-term disability, and life insurance, homeowners insurance, and automobile insurance are some of the essential policies everyone should have. You want to make sure that all of your hard-earned money and properties won’t vanish should a catastrophic event take place.
11. Put money in emergency and retirement funds.
No matter how low your salary may seem or how much debt you owe, always find some amount in your budget to save every month. Treat them like expenses you’ll benefit from in the future.
Start an emergency fund and a retirement fund to help you sleep better at night. Another tip is to put your money in a high-interest savings account, a certificate of deposit, or a money market account to erode the value of your money in the long run.
12. Invest in personal finance knowledge
Understanding how the money works is the first step to making your money work for you. Instead of relying on other people for advice, educate yourself by reading a few basic books on personal finance.
Don’t allow anyone to catch you off guard, including spendthrift friends who tolerate blowing tons of money every weekend and shady commission-based financial advisers who want to dig into your pockets. If you’re armed with knowledge, then you’re likely to be in control of your financial future and security.
Author Bio: Ina Salva Cruz is a resident writer for Insurance Adviser, one of the largest and most credible general insurance businesses in Australia and New Zealand, providing high-quality risk management advice for business owners. Being an enthusiast of pursuing financial security herself, she writes and shares self-help articles focused on finance and business.