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8 Things Couples Must Do Now for a Financially Secure Future

8 Things Couples Must Do Now for a Financially Secure Future

Whether you’re newlyweds, in a long-term relationship, or several years into a happy marriage, there are many steps you can take to ensure a financially secure future.

It’s wise to look at this from two points of view; first, what can be done to help the two of you remain secure throughout life, including your retirement? Secondly, determine what needs to happen right now for each of you to have financial security if one of you were to pass away at a young age.

Fortunately, this process doesn’t have to be nearly as difficult or time-consuming as most people fear. By making a few simple lifestyle changes and taking care of some critical paperwork, you can have a better future.

1. Make Wills

It’s always important to make a will in order to protect your partner. However, this is especially true if you aren’t married. After all, the state will be given the duty of dividing your estate if you die without a will, and this process always favors blood relatives.

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This doesn’t mean that married couples don’t need to worry about a will, though. Although your spouse is most likely to get the majority of your estate from the state if no will is present, the process of dividing everything could impose costly taxes on them that can often be avoided with a legal will.

2. Get Life Insurance

Both of you should have life insurance that names your partner as the beneficiary. There are many types of life insurance available, so be sure to take some time to research your options. For example, the Ladder online life insurance calculator helps you look at many aspects of your financial needs that may otherwise be forgotten.

By factoring in your remaining mortgage amount and other existing debts, you can get a clearer picture of how much coverage will be necessary for your partner to survive financially when you pass away. Doing this for each other is one of the best ways to show love because it ensures you’re each safeguarded and won’t need to sell your house in order to survive.

3. Determine Your Priorities

Most people could easily blow through millions of dollars if given the opportunity, but since this isn’t likely to happen, the two of you need to determine what your top priorities are. For some couples, this means living in a cheap apartment so that they can travel and build a retirement account. For others, a nice house is more important. By deciding what your top priorities are, you can adjust the rest of your life to continue saving money, while simultaneously improving your quality of life.

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4. Take Care of Your Health

A study by the American Heart Association indicated that exercising 30 minutes a day, five times a week, can reduce your annual healthcare expenses by $2,500. If you add in a healthier diet filled with vegetables and fruit, you’ll be in a good position to save even more money!

Commit to exercising and eating right to bulk up your retirement savings account, boost your life expectancy, and make it easier to enjoy your twilight years. After all, no one wants to spend the latter portion of their life feeling physically debilitated by medical issues that could have been avoided with a proactive approach.

5. Simplify Your Lifestyle

Take a look around your home. Is it filled with objects you don’t need and never use? Do you have a cable plan that includes hundreds of channels you’ve never watched? Is it common for you to buy new clothes before your current ones get anywhere near worn out? If you answered yes to any of these questions, you can save money by simplifying your lifestyle.

Reduce your cable plan or cut the cord entirely to save money. Start buying items only if they have a truly useful and practical purpose. Stop spending so much on clothing, especially if most of it hangs in your closet untouched for months at a time. Instead, put the money you would have spent on these things into your retirement account. You’ll thank yourself when you get older.

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6. Set Up an Auto Transfer

For many people, the process of taking money out of their paycheck and moving it into a savings account is where everything breaks down. People forget, or they end up spending the money on something frivolous.

Stop this breakdown in its tracks by setting up an automatic transfer. This will take the money out of your checking account and move it into your savings account for you. Experts recommend putting 10 to 15 percent of your net income into your retirement account. Overall, saving 20 percent is best because this allows you to also build a nest egg for emergencies.

7. Chip Away at Your Debt

Whether it’s a mortgage, credit cards, or old debt that’s hanging around your neck like an albatross, you must clear away this financial responsibility to boost your ability to save for retirement. It’s common for people to pay the minimum due on their debts, but this will drag your payments out for an extremely long period of time. Instead, even if you can only afford an extra $5 to $10 per month, be sure to always pay more than the minimum due.

It’s also wise to pick the debt with the highest interest and work on paying that one down as quickly as possible. Once you zero out a balance, start paying extra toward the next debt in line. According to Bank of America, paying just $10 more per month on a credit card balance of $1,500 with an APR of 18 percent will save you $1,202.41 in interest fees. The card will also be paid off in less than 4 years, instead of it taking an astounding 13 years.

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8. Make Wise Financial Decisions

One of the things that makes it heartbreakingly easy for people to lose everything is the tendency many of us have to overextend ourselves financially.

A great example can be found with people who agree to a mortgage that leaves them with no wiggle room for emergencies. In other words, if you and your spouse make a combined $7,000 a month, but your mortgage, bills, and other necessary expenses cost $7,000, you are setting yourself up for disaster.

Always make sure that you set up your expenses with a cushion of at least 20 percent. This makes it possible to build a savings account, and it also makes it less catastrophic if someone gets sick or loses their job.

It may seem daunting to make lifestyle changes and take on vital steps such as writing your wills, but this is the best way to have a happy, financially secure future. Don’t forget that exercising and eating healthy are also critical for future financial and physical health. As an added bonus, there are many proven ways to save money while eating healthier.

Begin implementing these changes right now to reduce your future risks.

Featured photo credit: Kan Wu via flic.kr

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Holly Chavez

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Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

Reference

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