Wednesday, 3 May 2017

Financial Savviness For Major Life Events



Are you prepared for anything when it comes to your money? There are plenty of the main life events that can cost you a fortune, and unless you make informed choices about savings, spending habits, and investments, you could be forcing yourself - and your family - into a corner.

In today’s guide, I’m going to take a look at some of the most important life events that everyone will experience, and ensure you understand some of the things you can do to prepare for them financially. Let’s get started with the absolute basics.

Start saving

Getting into the habit of putting aside some money every month is vital for anyone and everyone. Even if you can only afford to make small contributions to a savings pot and an emergency fund, it is critical to look ahead to the future. Make sure that you pay off your expensive debts first, of course, and address any areas of your life where you are overspending. But, essentially, the earlier you start saving, the more secure you and your family will be.

Think about retirement

It’s never too early to start thinking about your retirement. The difference in your income when you start a pension in your twenties and when you start one in your thirties is huge. With good health and a little luck, your retirement funds will need to see through anything between 20-30 years, so don’t underestimate the importance of building up a good pension.

Consider the worst

Whether you are young, free and single or have a family, no one has any idea of how long their life will last. And bleak as it may seem, you need to consider what happens when you aren’t here. You should compare funeral plans to make sure that your loved ones aren’t saddled with enormous cremation or burial costs. It’s important to draw up a will, too - especially if you have children. And finally, make sure you have plans to pass on your financial affairs with a power of attorney if you suffer from some sort of mental health issue that means you can no longer make any decisions for yourself.

Buying a home

Buying a home is likely to be the single biggest expense of your life - and the more you have set aside for a deposit, the better. Larger deposits mean that you will be able to access better deals on mortgages, and it will also lower your monthly payments by a significant amount. It’s also a good idea to keep yourself free of bad debts as much as possible. The worse your credit score, the more unlikely it will be that you manage to get a mortgage. And the better your credit rating, the more likely you will be seen as less of a risk to lenders, who will reward you with a better home loan deal.

Sound financial planning is essential in all areas of life, of course. But even more so for these major life events. How are you saving for your future? Share your thoughts in the comments section below. 

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