When we plan for our future, we dream about a lot of things to do, like travelling the world, buying a
house, a car and then retire with a secure and stable status in life. All of these are dependent on the
financial planning that is done during the peak time of your career. So here are a few tips on how you can
secure your financial future.
Regular Savings
There is no better way to avert emergency situations than to have an emergency fund ready at the time
of need. Keep aside some amount of money every month to a savings account. Who knows, there might
come a time in life when you’re switching jobs, unemployed, or unable to work due to unexpected
circumstances. This fund will come in handy in those times. Ideally, people opt for savings which equates
to three months of living with all regular expenses covered. This can be a splendid lifesaver at the right
moment. It’s not an easy task to save up to three months of money and it takes time.
Protection Insurance
Protection insurances are financial schemes or policies which protects you in cases of sudden
unemployment, accident and sickness.
The most common type of protection insurance is life insurance. In case of unexpected death, the
nominees or pre-assigned dependants will get financial help. It can be a single instalment of a lot of money
or regular payments. The amount is settled by the conditions and factors which had been agreed upon
earlier.
Income protection is another type which provides support when you are unable to work due to injury or
sickness, and income falls. This policy is most suitable for self-employed personnel.
There is also short-term income protection insurance which supports the person in question for a limited
amount of time with regular monthly amounts, should he/she be unable to earn because of injury or
sickness. This is a type of income protection. There are special medical care schemes, covering you in case
of critical medical conditions. Most protection insurances require a regular monthly fee widely referred
as ‘premium’.
Protection insurances may come in handy as a pre-planned measure to handle unexpected situations in
life with a bit of more comfort and ease in terms of finance.
Don’t keep pending debts
In the modern lifestyle pattern, people tend to be in more debt. Mortgage, credit cards, long-term loans
and other types of schemes. There are both secure and unsecure loans. Mortgage is a secure loan which
ensures you get back your property upon repaying the debt in full. A Credit Card bill is an unsecure type
of loan because it keeps looping with interest if not paid in due time. It’s better to keep clear of unsecure
loans or debts.
Retirement funds
Consult a professional financial service provider or investment firms who offer retirement funds and
schemes. Go through all the probable options and plan on a retirement schedule or when you’re likely to
retire. You can balance it out with more investments towards the early age and slowly move to fewer
incomes as you become older.
Try to invest in a second income source or self-generating income
It might not always be possible, but investing in a second income source like a small business,
entrepreneurship or a side project will allow you to have more flexibility, though it takes a bit of added
effort. In the wide perspective of things, this will work out with sufficient time, effort and determination.
As it will grow over time, it will generate its own income and you can still keep on earning even when
you’re retiring.
These are only a few major ways of planning for a secure financial future. Of course, it’s easier said than
done. However, planning early on and starting to execute them early with full focus and carefulness will
bring good results. Checking out all possible options, planning appropriately and minimising the
unnecessary costs are essential steps to follow