Financial security is one of those things in these times that seems to be scarce. Everyone wants it, but only a few know how to get it. How did it happen that this came to be?
There really is not one good answer to that question, but there are some ways that you can begin to work towards financial security. Although this list is for those just starting, there is something to be said for getting back to the basics for everyone. Even those who are far ahead can still learn something here.
- Take advantage of your greatest tool
Although it is a cliché, there is wisdom present in the old adage “You are your greatest asset.” So long as you live, of course, you have knowledge and experience that cannot be taken away by a natural disaster, a home fire, an expulsion from your current job if you have one, or a job market crash. There are very few exceptions to this rule.
Therefore, continue investing in yourself. Engage in the age-old practice of autodidactism, or self-motivated learning. The more that you educate yourself, the more valuable that you become to employers. And the more valuable you become to employers, the harder it becomes for them to lay you off and the easier it gets for you to get paid more.
- Ensure that you are insured
One of the easiest ways to get some financial security is to keep yourself insured. There are a multitude of options out there that allow you to recover quickly from any kind of disaster. Here is a short list of some insurances that could help.
Disability insurance is great for when some illness strikes and you or your loved one is unable to work for a time, and it is easily one of the best investments that young workers can make. For natural disasters, home insurance works well, because you may lose your financial documents in them. Finally, life insurance, though morbid, can be a good investment as well. Generally speaking, try to get a plan that would pay for 7 to 10 years of income with the payout.
- Only borrow if you really need it
This one is one of the more important ones. This is because, as a general rule, you always need to pay back the debts that you owe. Even if you manage to accumulate a lot of money, if you still have debts, that probably will not matter much in the long run. A debt of a million dollars when you have managed to get half a million is a bad trade.
Go through your records and look at how much debt you have at the moment and create a concrete plan to pay it off within a specific time frame. 10 years is usually a good time frame. Find a review of the company that you consider opening any future credit cards in and ensure that you get a fair deal with them. Pay off the debts with the highest interest rates before you start on the others.
- Allow yourself to live simply
This ties in to the previous point. Just because you have a lot of credit that you can put towards any number of purchases does not necessarily mean that you should. Discretion is your friend. Before you make a purchase, the question “Do I really require this, or do I just want it?” This can help you to make good purchases with the money that you do have, rather than the money that you wished you had.
- Keep money around, just in case
A good rule of thumb is to never trust any force outside of your own home. Banks can fail. Storms can come. Others may cheat you. If any of these happen, you need to be prepared. Get a safety deposit box and put in enough money for you to live comfortably for a week. That can give you enough time to recuperate and figure out what steps to take next. Be creative. Think of ways to store large amounts of money that you can easily access, perhaps even within your own home. If you need it, you will be glad that you have it.
Take it easy
Above all, try not to stress about it too much. After all, all of these tips are just in case something happens. That is not a guarantee that something is going to happen. Just keep your wits about you and follow these tips and you should be a-okay.