With hashtags like ‘YOLO’ taking center stage, it’s never been cooler to live in the moment. There’s nothing wrong with being spontaneous, and living life to the full, but there’s a lot to be said for adopting a measured approach to managing your finances. The reality is that nobody knows what the future holds, and many of us find ourselves in situations that we didn’t necessarily expect to encounter. If you’re trying to find the perfect balance between enjoying your life now and readying yourself for what’s to come, here are some tips to prepare your finances for any unexpected hits.
There’s no doubt that it can be fun to spend with wild abandon, but not many people can really afford to shop without checking the price tags before they get to the till or book last-minute, 5-star breaks on a whim. Budgeting is an excellent means of controlling spending and making sure that you live within your means. There’s absolutely nothing wrong with treating yourself, but keep an eye on what’s coming in and what’s going out of your accounts. It’s very easy to overspend in an age of contactless payments and credit cards. Draw up a budget, work out how much disposable income you have, and try and save every month.
Create an emergency fund
You could be in the most stable financial situation, but still come undone if you’re hit by a bolt out of the blue. Consider if you’d be able to cope if your car needed extensive repairs, your home was damaged by floods, your pet needed life-saving surgery, or you were diagnosed with a chronic health condition, which meant that you couldn’t work. An emergency fund is a brilliant idea to protect you both in the short and long-term. If you do find yourself facing a scenario where you need financial assistance, it’s essential to do your research and find out what kind of help is available, and how you can best use your accounts, and take advantage of your insurance premiums. If you have any troubles, for example, with a company that won’t pay out for a disability claim, seek advice from experts like Frank Darras. Nobody knows what’s around the corner, and while it may be impossible to predict the future, it’s always helpful to be prepared. Once you’ve sorted your budget, you can work out how much you can transfer to your SOS savings account every month.
Put money aside for the future now
If you’re in your 20’s, 30’s or even your 40’s, you may feel that retirement is a long way off. That may be the case, but there’s nothing wrong with starting to think about saving for your future. You don’t want to work tirelessly for decades to not be in a position to enjoy your time off. Look into pension schemes, see a financial adviser, and start putting money aside now.
Have you ever thought about what might happen if your finances take an unexpected hit? Would you be able to stay afloat, or is there a possibility that a bolt from nowhere could send you under? There’s a lot to be said for embracing the YOLO concept, but it’s also wise to protect yourself too.