What Must I Do With My Money?

9 Jul

money questions

You have probably asked this question a lot. If you have started to think about settling down, or just about gotten settled, (yes, I’m talking to YOU!), here are a few things you MUST DO with your money:

MUST DO #1: Cut up your credit cards and start paying cash.

Cut-up-credit-cards

This should get you in the proper mindset that what you don’t have money to pay for, you don’t buy. Credit cards are “fake money” in the sense that there isn’t any money there at all. We still have not earned it yet, therefore don’t go buying in advance those gadgets you’ll never need. Cut those credit cards so you don’t get tempted to use them. No cash, no buy.

MUST DO #2: Start paying your credit card bills one at a time until you are fully paid.

pay off credit cards

This can lead you to a good start even before your family starts growing. You don’t want to begin your family life with a mounting debt. Begin by paying the full amount due if you can. Never settle for the minimum amount. This incurs penalties and interests that just makes it so hard to finish paying your bills off. Invest time to negotiate with the account officer of your bank to waive penalties and interests. They don’t go telling everyone about this but you are sure that they will allow you more room to move if you just go and try. This shows them your goodwill that you want to pay your outstanding liabilities and debts. They would much rather get paid than not at all.

MUST DO #3: Set aside at least 6 months worth of expenses for your emergency fund.

emergency-fund-300x300

This is for those instances and situations where you are caught off guarded: when you or your family member gets sick and have to pay hospital bills, sudden lay-offs, or sudden resignation (just because you can not take your work or your boss any longer). You don’t plan for these things to happen, but at least prepare for these eventualities. You don’t want to rely on your parents’ allowance, or stay with them, do you?

If you are married and have children, then these additional MUST DO’s are for you:

MUST DO #4: Get a personal term life insurance for you and your spouse.

Life-Insurance

You don’t want to leave your spouse, or your children burdened by your sudden death. If you are the breadwinner of the family get a life insurance first because of the potential income loss. If you and your spouse are both working, then get one for each of you. Explore and ask around the best life insurance for you. I suggest a term life insurance so that you get the best coverage but the lowest possible premium amount to pay. The rest of the money can go to your emergency or retirement fund if you haven’t done that yet. Stick to the big multinational companies. Look for long years of experience and success rate.

MUST DO #5: Buy a personal health care insurance for you, your spouse, and your children.

health care

If you are working and your company covers your health plan for you and your family, then you need not worry. But for those whose coverage are limited to the business aspect of the performance of their work, and limited only to the employee, then you MUST get a health care insurance to pay for those sudden visits to the doctor or trips to the hospital. You don’t want your income to just get flushed out by high hospital bills and professional fees.

MUST DO #6: Invest in educational plans for your children.

educ plan

You will do your children great favor when you secure their education and future as early as now. There have been many instances when children had to stop their schooling or downgrade their school because of the demise, or retirement, of an earning parent. Look for a plan that will answer the needs of your children when they get to high school or university.

MUST DO #7: Look for a funeral and internment plans for you and your spouse.

funeral-plans

You want to leave this world with peace of mind knowing your family will have the money to pay for those inevitable expenses. Since these things are unplanned, you also do not plan for its accompanying expenses. But the burden to bear is left to your family. Where will they get the money? Will they borrow from relatives, or pawn/sell their valuables? If you have set aside a fund, you are not leaving them with worries, but only the much needed time and space to grieve.

MUST DO #8: Build your retirement fund.

Piggy Bank with retirement savings chartIf you are in your 20’s or 30’s, then you still have half your lifetime to build your retirement fund. This is the best time to start. Start planning and take a look at different investment vehicles such as the stock market, equity funds, real estate or even T-bills or bonds. But if you are nearing 40’s or even in your 50’s, then you are in danger of overtime. Even if you have your retirement package tucked in well, you still have to worry about rising medical costs and living expenses because, let’s face it, you are getting older, and you won’t have a job to lean on. Unless you plan on working till you drop dead, you better start planning on saving for your retirement fund. As a word of caution: do not invest in vehicles you do not know about. Do your homework. You don’t just want to give your life savings away.

If you have done all this by now, then CONGRATULATIONS! You are on your way to financial freedom. You have a plan, remember to STICK TO IT!

Life is Amazing!

LENY

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