If ever there was a time that demonstrated the uncertainty and unpredictability of life, it’s now. Even if you’re young and you’ve got a stable income, it’s beneficial to start planning now to reduce financial stress in the future. Here are some steps you can take.
Saving
With many people facing a very uncertain few months ahead, the benefits of saving cannot be underestimated. Budgeting and putting money aside can help to prevent overspending and create a nest-egg. If you don’t already save money on a monthly basis, it’s a good idea to set up a direct debit on your payday. If you can afford to put even a small amount of cash aside each month, this will help to create a more stable, secure future. Use budgeting techniques or apps to work out how much disposable income you have in an average month and save whatever you can. If you transfer a lump sum as soon as you get paid, this will enable you to plan the rest of the month and reduce non-essential spending.
Retirement planning
If you don’t plan to retire for another 30 years or so, you might not think that you need to worry about pensions or investments at the moment. The truth is that the sooner you put plans in place, the better. If you don’t have a pension already, or you’re unsure whether your current pension is the best option for you, it’s worth seeking advice. If you’ve already taken out a pension, and you’re concerned that you have been misled, it is wise to investigate SIPP pension claims. To avoid finding yourself in this situation, if you haven’t already got a pension, research before you sign on any dotted lines and don’t hesitate to ask for help if you’re not sure which product is best for you.
Creating an emergency fund
You only have to read the newspapers or listen to the headlines to see that a bolt out of the blue can cause financial problems for anyone. Even when life seems to be rosy, nobody knows what is around the corner. Having an emergency fund will provide peace of mind and financial support if you do find yourself in a difficult situation. An SOS fund could help to cover you if your hours were cut at work, you lost your job, you had an accident, or your home or car needed urgent repairs. Start saving on a regular basis and look out for savings accounts that offer high interest rates or the ability to save on tax, for example, an ISA. It’s also worth ensuring that you have insurance policies to protect your home, car and family. If you have insurance, this can cover unexpected costs and reduce anxiety linked to money problems.
Nobody has a crystal ball, and you never know what the future holds. Taking action to manage your finances and start saving, and planning for the future now will be beneficial in years to come. Try and save more each month, take advice from experts on board and plan for your retirement.
