7 Steps To Secure Your Financial Future

 

 

Secure your future with these 7 steps.

 

It today’s tough economic times, it pays not only to take care with your money, but plan ahead in case you’re suddenly facing something worse.  How?  By taking these 7 important steps:

 

Plan ahead.

Get on track.

The 7 Steps

 

(1) Create a Plan B. The path you’re on right now is Plan A.  Hopefully, you’re employed and doing what you can to keep chugging along, but what happens when something unexpected comes up?  For example, say you lose your job or get waylaid by an injury—then what?  Creating Plan B is simply another way of saying look ahead and plan what steps you might take in order to minimize problems that come at you down the line.  For example, if you had to move out of your apartment do you know where you could go, even for a short stay?  Talk to family and friends and build your own safety net.  Chances are, they’d be happy to know they had a friend or loved one they could turn to, as well.  Having people and resources you can count on in an emergency can mean the difference between living under a roof or out on the street.  It pays to plan ahead.

 

(2) Get out of debt now. No matter how you got there, debt cuts into your ability to make choices in the future.  It’s best to think of the interest you pay on your debt as a voluntary tax.  When you do that you suddenly hate the whole concept of debt—you realize a 3rd party (in this case your bank) is taking money from you simply because they can and you continue to allow it.   Don’t let them have your hard-earned cash!  It’s your future we’re talking about.  Banks borrow at ridiculously low interest rates and turn around and charge you ridiculously high ones.  It’s a game they win every time you use your credit card.  Stop the cycle now.  Cut up the cards and make a plan to get out of debt.

 

Climbing steps.

It may seem hard at times, but if you take all the steps you'll get to the top.

(3) Build up an emergency savings fund. How long would it take you to find work if you lost your job today?  While you may qualify for unemployment it’s only a fraction of your current pay.  That makes it critical to start saving money.  Most experts recommend maintaining a fund equal to six months of your pay.  However, if you have credit card debt start by paying it off first— the interest you pay on it far exceeds the interest you’ll earn on a savings account.  And don’t worry that it’ll take you awhile to save up enough.  Having anything in an emergency fund is far better than having nothing.

 

(4) Keep your resume up to date. Even if you like your current job it pays to keep your resume up to date.  Employees often are unaware of their company’s true financial situation, which can be so bleak they could lose their job even if the quality of their work is excellent.  Don’t let the unexpected rattle you more than it has to.  Keep references up to date.  Keep track of any awards you earn at work. Take advantage of your employer’s policy on free or subsidized education.  Volunteer for special projects that may put your name out there and give you something to “brag about” in an interview.  And stay in touch with people who move on to other jobs as they can often be great resources if you need to make a sudden change.

 

(5) Stay connected. No matter the issue, having friends or knowing people who know people can make all the difference in solving problems.  Stay connected on line with social media, but don’t overlook the personal touch.  It’s often far more rewarding to join clubs, or professional organizations and meet people face to face.  And if you lose a job, having lots of contacts is the fastest track towards finding new work.

 

Maybe it's time to downsize.

The things you own have a way of owning you. Bigger is nice, but is it really better?

(6) Downsize. Downsizing is not just a concept that applies to seniors.  The tendency in our country is to buy bigger.  There’s almost a built-assumption that bigger is better.  However, larger sizes usually equates to higher costs so the only people who really win in this scenario are all the people seeking to market products.  Bigger homes cost more up front and take far more to maintain.  Bigger cars take more fuel.  Bigger portion sizes play a significant role in gaining weight, which in turn leads to bigger medical bills down the road.  Bigger weddings may be beautiful, but big or small you still end up married.  Before you buy bigger, ask yourself if bigger is all it’s cracked up to be.  All those bigger choices can add up and take a huge bite out of your finances.

 

 

(7) Build a retirement fund. It’s going to be hard to think about retirement if you’re just scrapping by, but if you really believe social security and medicare are going to be able to meet all your needs in your twilight years, expect to be unpleasantly surprised.  The hard truth is our country’s huge debts make it ill-equipped to keep these programs running without (a) significant cuts to benefits and (b) asking taxpayers to foot a greater portion of the bill.  However, you can lesson the impact of future cuts if you plan for it and create your own retirement nest egg.  Start by putting a little money aside every month into either an IRA or 401K.  You can start an IRA at a bank or brokerage company.  You can start a 401K at work if your employer offers a program.  Both offer significant tax advantages and a portion of the money you put into a 401K at work will often be matched by your boss—that equates to free cash!  It’s never too late or early to start thinking of retirement so start a program today.

 

The Long View

 

Stick with the plan.  You'll get there.

It takes time to find the right balance.

Taking control of your financial future is ultimately about taking regular and consistent steps toward getting out of debt and saving money.  Don’t get discouraged if it feels like it’s taking too long.  You can do this.  Don’t give up.  Start by figuring out where you are today and then decide where you want to be a few months from now.   Keep track and before you know it, you’ll be able to look back and see all the progress you’ve made along the way.

 

For more ideas on personal finance read:

Cut Your Mortgage Down To Size
How Much Should I Save Every Month
Should I Buy Or Rent

 

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