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When you’re young and carefree, you may not pay much attention to your finances or saving for your future, but it’s always wise to keep an eye on your bottom line. The sooner you learn to budget and start putting a little bit of money aside on a regular basis, the better. Believe me, I so wish Mr. MMM and I would’ve made our finances a priority much sooner than we did. But, alas, it’s better late than never.
Saving For Your Future
It’s very common to go through life without giving the future too much thought, because, let’s face it, when you’re young your future seems infinite. Unfortunately, it’s not. And the reality is that there are lots of things (think: a house, retirement, college educations, vacations, etc.) that are worth saving for today, so you can have a better tomorrow.
They say money can’t buy happiness, but it can give you peace of mind and, wait for it…options. If you’re guilty of throwing caution to the wind or you feel like you could be a little more careful with your cash, here are some of the best reasons to start saving for your future now.
Buy vs. Rent
Most of us grow up with aspirations to become a homeowner. There’s nothing wrong with renting, and the rental market is booming, but the majority of people still, eventually, buy a home.
Despite the booming rental market, in many cases, buying a house also makes financial sense, as you may end up paying a lot less for a mortgage than you would for rent on a monthly basis. And, if you don’t plan to jump in and out of houses, your property will have the opportunity to increase in equity over time, allowing you to recoup some of those initial transaction costs.
Being a homeowner also affords you the freedom to do whatever you like to make that house your home. Not surprisingly, we absolutely love that aspect of home ownership. Check out our home renovation. We truly did make our dream home a reality.
Buying A House
In this day and age, it’s not easy to buy a house, and you’ll need a significant deposit or down payment. The days of 0% mortgages are long gone, and in most cases, you’ll need a minimum of 5-10 percent.
If you are saving for a house, set up a savings account and try to make regular payments to see if you can handle the expense. You can also set up an automatic deposit/transfer to make saving the same amount each month even easier. And if you have extra money at the end of the month, you can boost your balance by saving even more.
When you’re searching for a mortgage, it’s wise to consider several offers, seek financial advice, and look carefully at the fine print. You’ll also need to consider fixed and variable rates and work out which option suits you best. During the home buying process, it’s extremely important that you know exactly what you’re going to be paying for, and for how long. Due diligence is a must, so don’t skip it.
Other articles you might enjoy:
- We Made Our Dream Home A Reality
- DIY Hacks For Creating Personalized Artwork At Home
- Our Complete Guide To A Custom Home With Frugal Decor
- Buying A House? Due Diligence And Gut Instincts Matter
Eliminate Debt To Achieve Financial freedom
Did you know that the average US household has $16,000 worth of credit card debt? Yikes. If you’re in debt, it’s always worth trying to get back into the black. Unfortunately, if you owe money, you’re likely to incur interest, and plenty of it.
Once you’re in debt, it can be hard to shake off the shackles, and it’s easy for debt to spiral out of control. If you have credit card debt, ensure you’re making the monthly payments. And, if possible, try to pay more than the minimum payment. This will drastically reduce the amount of interest you pay and get you out of debt way fast.
The more you spend, the more you’ll owe, and the more interest you’ll be charged. If you feel like you can’t control spending on your card and you use it without really thinking about it, give it to somebody you trust or cut it up.
I have even heard of people freezing their cards. And when I say freezing their cards, I mean just that. They actually put their cards in a bowl of water and freeze them in the freezer. Now that’s hardcore – but it might be worth it to get control of your money. It may be difficult to adjust to life without credit, but you’ll soon get used to it, and at least you won’t be adding to your debt.
Other articles you might enjoy:
- F.I.O.R. – Financial Independence Optional Retirement
- The Long And Sometimes Windy Road To Financial Independence – Vol. 1
- The Slow And Steady Race To A Healthy Financial Future
Your health is something you should never take for granted, but often, we only realize how important it is when we start feeling under the weather. As my dad always said, nothing matters if you’re not healthy. I agree wholeheartedly. A few months ago I had a pretty bad illness because I was burning the candle at both ends. I was knocked on my butt for weeks and the only thing that seemed to matter was getting better.
With that in mind, It’s never too early to start saving for your own health. As you all know, healthcare isn’t cheap, and at some point, it’s highly likely that you will have to pay for treatment of some kind.
If you don’t already have insurance through an employer, have a look at plans and policies online, weigh the options and protect yourself. Without insurance, you could end up with bills amounting to thousands or even hundreds of thousands of dollars.
If you’re someone who is already enrolled in Medicare but you want to take out a more comprehensive policy, you can buy supplemental insurance to cover the gaps. If you go online, you can access articles and web pages that will enable you to learn today to start building a healthier future tomorrow.
Even if you are lucky enough to have a comprehensive insurance plan, it’s still worth putting money aside in case of an accident or emergency. You’ll never regret having a medical nest egg in your financial arsenal.
When you’ve worked tirelessly for decades, the last thing you want is to have nothing to show for it. Even if retirement is a long way off, it’s still worth thinking about your future and how you’re going to cope with financial obligations when you hand in your notice at work.
Saving for your retirement could give you financial freedom, as well as the opportunity to enjoy that sought-after post-employment high life. Just picture it. Saving for your future today will allow you to have a fat stash in the bank (read: security), travel to far-off places, and buy that vacation home you’ve always dreamed about!
Other articles you might enjoy:
- Can You Really Retire In Your 30s?
- Early Retirement Will Take A Little Longer If You’re Total DIKs
- Early Retirement Resistance – When Friends Push Back
- How We Plan To Hack Early Retirement
- The Biggest Benefit Of Early Retirement
- Early Retirement And Quitting Your Job
If you have children, it’s only natural to want the best for them. Oftentimes, wanting the best for them means saving for college. Coming from someone who didn’t have any parental help in that department, providing your child with tuition assistance will give them a HUGE financial advantage in life.
If you can swing it and you have all of your other financial bases covered, set up a fund for each child when they’re born and put a small amount into that account every month. You can add to the account whenever you have extra dough, and you can use the money you save to pay for college fees, a wedding, or even a house.
Saving for your future doesn’t always mean saving for your future. Every parent wants the best for their child, and while money isn’t the be-all and end-all, it does help to provide children with something we love more than anything around here…Options!
Other articles you might enjoy:
- What We’re Teaching Our Little Girl About Money
- You’re Not A Bad Parent If You Can’t Afford To Save For College
- Kids & Cash: Grasshopper Teachings
- Life Lesson: How A Mantis Saved Us Money And Enriched Our Lives
At the end of the day, life shouldn’t be all work and no play. It’s important to have a balance. When you work your butt off and you have all of your financial obligations covered, it’s important to reward yourself with a few luxuries.
Perhaps you like to take a vacation every summer, or you want to get away for the holidays. If you’ve got big travel plans, it’s easier to make them a reality by saving over a defined period of time.
If you know you want to take a trip that will cost thousands of dollars, you can work out how much you need to save per week, put that amount aside and hit your savings target in no time. As with anything money related, consistency is key.
Summing It Up
Many of us go through life living in the moment without really giving the future of our finances much thought. While it’s fun to be spontaneous, it’s also vital to carefully manage your money. Unless, of course, the idea of blowing through a lifetime of earnings and eating cat food in retirement sounds appealing.
There are lots of things that are worth saving for, including your kids’ college funds, healthcare, a new house, or even the trip of a lifetime – read all about our not-so frugal Disney vacation!
The sooner you get a grip on saving and budgeting, the better. Regardless of your age, know that it’s never too early or too late to start planning ahead. Trust me, time flies, and it’s always a good idea to be financially prepared for whatever life throws at you.