Let your golden years pass without financial headaches. Get this area of your life in order with the following tips.
Put aside three paychecks
You never know what obstacles you’ll encounter along the way, but you’ll be prepared for almost anything if you’ve saved enough. Create a reserve fund of at least three of your salaries. This money will help you survive if you’re suddenly laid off. Don’t stop there and keep adding to your account. The main thing is to clearly define how much and in what situations you can withdraw from it.
Sort out your loans
Penniless student years, starting a career, moving to another city – most often these milestones fall in youth, or even adolescence, when desires rarely coincide with possibilities, you want everything at once. A loan could really help you achieve your dream faster at one time, but it’s time to admit: in the long term, interest-only loans slowly steal your money, unless each of your loans turns out to be a profitable investment. Be honest with yourself: if you manage to pay monthly payments and save up for a purchase, it’s time to pull yourself together and climb out of the financial hole to finally start enjoying financial freedom. Strive for your only debt to be a mortgage.
Automate your finances
Approaching the age of 40 is a great time to get your finances in order. Firstly, you have probably already established yourself as a specialist, and secondly, you still have time to enjoy your achievements: retirement is still a long way off. The most common mistake now is to rush to raise your standard of living with an increase in income: spending at zero will not bring stability. To protect yourself from emotional spending and thoughtless purchases, automate important financial flows. For example, set up an automatic transfer to an account with interest accrual. And replenishment of a credit card, if you can’t refuse it. This way, “extra” money will work for you, and debts will not become an unpleasant surprise at the end of the month.
Build capital
Try to ensure that the hope for an old-age insurance pension does not become the only guarantee of a comfortable future. You need to build up capital as early as possible, but even closer to 40 there is still a chance to improve the situation. Any passive income is a big advantage. For example, do not rush to sell an apartment received as an inheritance. A fresh renovation, unlike real estate, will not feed you. In addition to profitability, pay attention to reliability: we recommend using only insured deposits and financial instruments so that your efforts are guaranteed not to be nullified due to problems with the bank.
Buy insurance
By 40, you have a lot to lose, so it would be a good idea to be on the safe side — literally. Insurance companies offer options for every taste and budget. You can insure yourself against fire and cancer. Determine which areas you have the greatest risks in and compare offers from different companies. It may seem like a waste of money right up until the moment an emergency occurs. So why not take responsibility for your confidence in the future upon yourself?