There are countless fables and stories that illustrate the importance of saving money and of saving for rainy days (many of them involving squirrels…) - but still a vast majority of us will continue to spend our cash as it comes in and not think ahead past the end of the week. You’ll know if you’re among the guilty – you’ve been earning now for several years, but instead of putting it into a bank account and saving it, or setting up various provisions for your family and your old age, you are instead treating yourself to nights out, DVDs, holidays and expensive gadgets. It’s all very good and well until something goes wrong and you – or your loved ones – are left with no income and nothing stashed away for such a scenario.
In other words it is absolutely crucial that we be sensible with our money and that we make provisions for a time when we may not have access to the same resources we have now. This doesn’t mean just opening up one saving account either, but rather making sure to have various different provisions set up for a range of contingencies. Here we will look at a few of the things you should set up right now to start making yourself and your family more financially secure.
First of all you should have some kind of savings stashed away that you add to out of each pay check. It might not be any fun, but it does mean that if you suddenly lose your job or have a big expense you don’t expect, you will be able to cover it. At the same time you should also think about your savings as stepping stones to the future – if you one day want to buy a house, or want to be able to provide for your children and help them do the same, then you need to put some money aside to do so.
Likewise outing savings to one side is also a very smart way to grow your money. Find a savings account that has a good interest rate, and you will find that it grows exponentially over time. If you want to be extra careful with your money then you should have multiple savings accounts so that all your eggs aren’t in the one basket. You might even decide on offshore accounts or a Swiss annuity to make the money extra secure.
All of us deserve to one day be able to relax and stop working, and this is where our pension comes in. Here you will pay into your pension on a monthly basis, so that you get a lump sum or a salary of sorts once you retire. This then will allow us to live a nice lifestyle as we have become accustomed to, but without having to work every day.
Insurance is highly important to protect us financially against a range of potential outcomes. For instance home insurance and contents insurance will protect us in case a fire burns down our property, or we have a flood that destroys our worldly possessions and this can allow us to bounce back from an event that would otherwise wipe us out financially. Meanwhile life insurance will pay out in the event that we should pass away, and this will ensure that our family is financially secure when we are gone. This is highly important and demonstrates how important it is to make provisions not only for ourselves, but also our loved ones.