Financial stability isn’t built in a day – it requires a lot of work and formation of correct habits. But before you can even start doing this work, you have to make some decisions and take action – and what time can be better for it than the beginning of a new year?
1. Eliminate Debts
If you have credit card, unpaid student loans and similar debt, you should try and get rid of them as fast as possible and avoid getting into further debt. Although sometimes getting credit may be beneficial (if you want to use it to make an investment), you should never ever, under any circumstances, get credit for consumption. If you can’t afford something pleasant right away, you shouldn’t buy it – it is as simple as that.
2. Create an Emergency Fund
Think about how much you spend on average every month. Then make it your first priority to put aside enough money to support you for at least 3-6 months in case you lose your primary source of income tomorrow. When you find out how hard it is to make it work, you will probably understand how dependent you are on your employer, which will serve as an additional motivation to work on financial stability.
3. Think about Auto Insurance
Is your car insured? If not, it is high time to get to it. You may say to yourself that you are a cautious driver, that you haven’t had a single accident throughout your life, or that you can’t afford it. But the truth is, you are not alone on the road. And while you can try to be the safest driver in the world, it doesn’t cancel the existence of all of the kinds of irresponsible drivers around – and all you have to do to get into trouble is to meet one. So study auto insurance quotes and make sure you’ve protected yourself against all eventualities.
4. Buy into gold IRAs
Gold is probably the only commodity that steadfastly withstood all the crises, recessions and perturbations the world sent our way – for the entire duration of the known history. If it is stability that you are after, then you have no better choice than gold IRAs – because in their case, you may be completely sure you are not going to lose your investments. Just make sure to steer clear of suspicious organizations, and you are going to be alright.
5. Save with your 401k
Many young people today put off the planning of their retirements until the last possible moment – which is the wrong choice, no matter how old you are. Moreover, if you start putting money away in your 20s, you will be amazed how much you will be able to save by the time you retire. So start immediately, and your best bet is probably your 401(k). Try to increase it to the maximum of what your company is ready to match – even if you have to live frugally right now, it will pay itself off in time. Do your research, protect your future.
6. Think about Your Family
However unpleasant the thought is, all of us are mortal, and sometimes that is evident in a more sudden and tragic way. If there are people who depend on you – your spouse, children, parents – you have to think about their financial stability in case something happens to you. Insure your life and health – write a will and don’t put it off.
You may think that in your life everything is alright and nothing can go wrong, that you have plenty of time to put off thinking about your financial stability. However, things happen – and you will do yourself a world of good if you start this year with making some hard and unpleasant, but totally beneficial, decisions.
Featured photo credit: Money/401(K) 2012 via flickr.com