Financial security is a goal for most of us, but unfortunately not many are able to show financial readiness when retirement comes. It’s so easy to get lost in responsibilities and sacrifice savings for what appears to be a more pressing issue today. Truly, it takes discipline and money management savvy to be financially secured. If you always find yourself battling with money issues, perhaps all you need is to be reminded of some advice you have heard before from your mother. And if all else fails, go get a trusted financial planner on your speed dial.
Start now
Not tomorrow, not next month. Start saving today and be consistent. The only thing that should stop you from saving is if you have debts to pay. In that case, settle them first. Try to separate your retirement savings from your emergency fund, travel fund and other savings category. This prevents you from treating your savings as funds for anything out of the blue. Your mom was right all along; it should be treated as an expense and not something left from it. Automate savings if possible and if it can be deducted prior to tax computation, the better.
Invest
People used to think that a fat savings account is synonymous to financial security. Well, times have changed. It’s still good to have that healthy bank account but keep the rest of your savings in good shape by investing. Investing is not a new concept and definitely not only for the rich and famous. There are tons of investment opportunities for ordinary folks like you and me. The thing is, you need to know how it works in general and specifically how to diversify your portfolio, where to invest considering your age, risk tolerance etc. A good financial planner can walk you through these or learn it through experience.
The future
There’s no way to predict what happens next. Illnesses, emergencies and even your choice of spouse can wreak havoc to your financial security in an instant. And hey, old age and medical costs are not without connection. Hence, consider all potential expenses in financial planning.