Well, well, dear reader, glad to see you’re back. Hoping you’ve become penny wise after following through our previous article. To those of you that came here first, you can surely start reading this article first but be sure to also go look at the previous article in order to be financially woke.
Let’s get to business. According to a survey from TD Ameritrade, singles aged 37 and older are feeling insecure about savings, home ownership, and retirement. Here are a few more tips to secure your finances and ensure that you have enough funds to go off on that Around the World tour that you keep promising yourself.
An emergency fund is essentially an amount of money that you keep aside for emergencies. It is a fund that you keep aside for the unexpected “I am desperately in need of cash owing to no real fault of mine” scenarios and can be accessed at an hour of crisis or for unexpected and unplanned scenarios, and not for meeting your routine expenses. This fund must be designed to specifically meet unexpected financial shortfalls. Surveys have shown that while 40% of married folks have emergency funds, only 30% of singles do. For most married folks, their spouse tends to be their emergency fund. Since you neither have the privilege of having a human emergency fund to rely on or the obligation of being one for someone else, we’d suggest that you prep for any scenario that might play out in the future and live a stress free, financially secure life. An emergency fund, obviously, cannot be built overnight, you can build it gradually. Set aside an amount every month in a bank account which will eventually grow into a suitable emergency fund. And promise to not take out the cash unless it’s a true emergency which cannot be covered with ready cash.
Insurance and investment often seem like intense topics that only bankers in suits walking around making money like the ones you see in The Wolf of Wall Street talk about but reality check buddy: insurance and investment are everyday people’s concepts. Insurance is simpler to deal with and there are multiple types of insurance, which most of you probably know because of those smartphone insurance advertisements that we’re constantly bombarded with. Life insurance is designed to provide financial security for dependents but just because you’re unmarried doesn’t mean you should actively ignore it. If you have debt or are financially responsible for an elderly parent or simply don’t want anyone else having to pay for your funeral expenses, life insurance covers you in all three scenarios. Get a head start on insurance, especially life insurance, because the younger you are, the cheaper life insurance will be. With respect to investment, as your earnings start to ramp up, it is probably the best time to start making smart investments that can grow faster than inflation and provide for long term growth. You could also consider investing in real estate and if you start early, you could be mortgage free by the time you retire. If you’re unsure about how to proceed with investment, don’t hesitate to ask someone for help or go to a professional financial adviser.
A recent Ramsey report showed that fewer singles opt for retirement plans as opposed to married couples, with only 49% of single people opposed to 65% married people who save. And that it is a disturbing statistic, one that needs to be changed now. Retirement maybe a long way ahead for you, but the most beneficial and wise thing you could do right now is making your retirement plans. Of course, it’s not going to be a walk in the park if you’ve just graduated and are still struggling with student loans and every other expense that comes with becoming an adult. If the company you work at offers a retirement plan, don’t hesitate to join in. Add beneficiaries to all your financial accounts and see an attorney for a will. Make sure all your estate plan documents are in order and this basically includes your will, power if attorney, healthcare directive and life insurance. This is sine qua non as failure to do this will mean that without your directions on the previously mentioned documents, the court of law would make these decisions and they might not be what you intended or wanted.
Without the accountability or income of a partner, like Kevin Brauer says, “It’s all on you.” And that makes it even more important that you plan well, stock up for a rainy day, avoid overspending and work responsibly. Following the above mentioned and those from the previous article, is a great start to securing your finances but keep reading.
This, dear reader, is the end of this article but woe to you if this is the end of your financial self-education. Keep educating yourself and reading more, remember, knowledge is power.
Pro Tip: Refer to this and this for more financial gyaan that’s bound to make you feel as confident about your finances as the Gates and Ambanis themselves.
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