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10 Things You Should Be Saving For Just In Case

10 Things You Should Be Saving For Just In Case

You know you should be saving your money, but do you know why? Here are ten things you should be saving for, just in case. Don’t be caught off guard! Knowing what you need money for will make it easier for you to save.

1. Paying off debt.

No one wants to be in debt their entire life! Sure, that credit card was supposed to just be for emergencies, but you started using it here and there, and then you realized you couldn’t pay the monthly bill. That’s ok — after all, that’s what credit cards are for. But don’t let your debt accumulate. Interest rates will make your fees skyrocket, and before you know it, the amount you owe will seem impossible to pay off. Instead, pay off a little per month. Try to meet more than the minimum due, if you can fit it into your budget.

2. Medical emergencies.

You’re healthy as a horse, right? Still, you never know when the flu is going to knock you out, or when you’ll get in a car wreck and have hospital bills to pay. You don’t want an unexpected illness or hospital stay to wipe out your savings, and you don’t want to be in debt or struggle to make ends meet just because of a medical problem.

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3. Periods of unemployment.

Financial advisors recommend having enough money saved to live for three to six months without any additional income. Go ahead and figure up your monthly expenses, multiply them times six, and see how much of a cushion you need to have. Are you close? If not, go ahead and add a bit into your current monthly savings that will allow you to save up this money. If you can, save even more — the more money you have in savings, the longer you’ll be able to live without a job. This means you won’t have extra financial stress when you’re unemployed, and can take your time to find the job that fits you best. It’ll be worth it so you won’t find yourself struggling if you unexpectedly lose your job!

4. Retirement.

When you’re in your twenties and even early thirties, retirement seems far away. In reality, it’s never too early to start saving for retirement. Think about it – this is money you’re putting aside so you can live more comfortably later! You won’t have to depend on Social Security income because you’ll have your own money put aside.

5. Buying a car.

It’s not too expensive to buy a car because you don’t have to pay for it all at once (but wouldn’t it be cool to buy a car in cash?), but the down payment and monthly bills can add up. If you don’t have it figured into your budget, then buying a car might set you off course. You should have money in savings that could be used for a downpayment and monthly payments on a car, just in case something happens to your current ride.

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6. Purchasing a home.

Or an apartment, or a condo, or a farm! Sooner or later, you’ll probably find yourself ready to settle down and have a stable living situation, instead of renting and moving every few years. You don’t have to pay for a home flat out, of course, but you’ll need a considerable amount for a downpayment. Also think about how you’ll need to have good credit and savings in order to get a loan.

7. Home and car insurance and repairs.

Once you’ve saved up for that car and that home, you’ll have a lot of additional expenses! You’ll need car insurance, home insurance, you’ll have to pay property taxes depending on where you live. Your car will need tune-ups and your house will need repairs and maintenance. You’ll need money in your savings account so your water heater busting or your muffler falling off won’t leave you frantically searching for a cheap, easy solution.

8. Education.

There may come a time in your life when you’ll want to go back to school and get a master’s degree or a special certificate. As a working adult, it’s possible to get tuition assistance, but not guaranteed. Instead of having to decide between going back to school or staying in the same dead-end job, wouldn’t it be great to know you have the ability to pay for your education? And if you never go back to school, this money can go to your children’s college funds!

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9. Investment properties.

Whether you already have your own house or not, having an investment property is never a bad idea. It could be a rental house for students near the university, or a beach house you rent out in Florida – these properties will provide income with minimal effort. Sure, you’ll be responsible for repairs and will have to screen your tenants to ensure they won’t damage the property and leave, but if you charge a bit more than what you have to pay each month for the mortgage and upkeep, you’ll make a nice profit!

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    10. Caring for elderly family members.

    You don’t want to think about it, but there may come a time in your life where you’ll have to take care of elderly family members. Grandparents, aging parents, aunts, uncles — who knows who will need help as they get older? You don’t want to be in the helpless position of turning down those who need you, so make sure you have savings to help them out. This could include groceries, living expenses, medical bills, in-home nurses or even helping move them to an assisted living home. These transitions are going to be difficult enough emotionally; you might as well try to lighten the load financially.

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    Featured photo credit: 401 (K) 2013 via flickr.com

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    Published on September 17, 2018

    How Being Smart With Your Money Leads to Financial Success

    How Being Smart With Your Money Leads to Financial Success

    Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

    With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

    So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

    1. Avoid being “penny wise but pound foolish”

    It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

    You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

    So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

    2. When you want something big, wait

    Impulsivity can get you in trouble in most aspects of life. Finances are no different.

    It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

    We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

    A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

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    So, you get the itch.

    You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

    Here’s where you have to take a step back.

    Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

    Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

    It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

    The impulse faded. And you just saved yourself a ton of money.

    3. Live smaller than you can afford

    You finally get that big raise. And you want to celebrate – and why not?

    You’ve been looking forward to this forever. And after all, it was all due to your hard work.

    That’s fine, splurge a little. However, make it a one-time deal and be done.

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    Don’t get caught in the trap that just because you’re now making more money, you should spend more.

    Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

    The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

    But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

    4. Practice smart grocery shopping

    Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

    But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

    Create a grocery budget

    Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

    Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

    I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

    Make a list… and never deviate

    Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

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    You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

    These impulse decisions will lead to overspending, which will derail your grocery budget.

    Eat before going grocery shopping

    It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

    If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

    After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

    Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

    However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

    This makes it much easier to stick to your grocery plan.

    5. Cancel your gym membership

    Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

    The average gym membership costs around $60 per month. That’s $720 a year.

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    Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

    I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

    Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

    Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

    For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

    Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

    There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

    It’s baby steps… And baby steps can start now!

    I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

    Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

    The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

    Featured photo credit: Unsplash via unsplash.com

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