Wherever you are in life, you can never be too prepared when the future is concerned. You may be doing great now, but do you have an answer to this crucial question: are you putting aside enough money for your savings?
With bills to pay and other urgent settlements, it can be tough setting aside a sizable amount of your salary for later. But you will always have things and necessities to pay and save up for. You will always find excuses not to save. This is why you must determinedly and consistently allocate a chunk of your income to your savings.
What if you suddenly find yourself in financial trouble? You may be earning enough for yourself now, but what happens you get a critical illness and become hospitalized? You may not be able to handle the blow without a proper savings scheme in place.
We're sure you know how important having extra money is, but read through the signs below to see if the time has come to devise a serious savings plan.
1. You don’t have specific retirement goals.
If you have no idea how much money you need for your retirement plan, then it could be a sign that you’re not saving enough for your future. At your age, retirement may be the furthest thing from your mind –– but anticipating the future and staying ready helps you develop a financial or investment plan, so you can live your life today without neglecting your needs for tomorrow.
Start checking out options at FWD Life Insurance. Find a plan that has an investment component or VUL, so that it has the potential to grow and be sizeable when you’re ready to use it.
2. You don't track down your expenses
Do you know how much you spend on coffee, travel, clothes, or even on your Netflix subscription? It can be very tempting to go on a spending frenzy, especially right after payday. Keep in mind, though, that if you're serious about saving, you must monitor your cash flow by listing down all your purchases. To help make this task easier, download expense-monitoring apps for free on Google Play and the App Store.
3. You're spending too much of your income
If you’re living from paycheck to paycheck, then your cash-strapped days will never be over. While it works for now while you’re young and single, you won’t be able to plan for your future. Make it a habit to set aside 20 to 30% of your income for your savings, even as early as now –– you won’t regret it, no matter when you’ll need it in the future.
4. You have credit card debt
If you’re not setting aside enough for your savings but you have managed to rack up credit card debt, then it is time for a wake-up call. A credit card is useful only if you're using it healthily.
Not only are you not saving enough for the future, but you are also spending more than you should. Ignoring your debt will only let it accrue in interest, which can cause a larger financial problem. Plan immediately by figuring out the quickest way to settle your debt in full. Next, plan your weekly and monthly budget to curb your spending and keep your limits in check.
5. You Don't Have an Emergency Fund
Whatever happens, you must always have an emergency fund aside from your main savings account. If the first thing that comes to mind with an emergency fund is loaning from trusted friends or relatives, then it is time to make immediate plans. The purpose of having an emergency fund is to have sufficient cash in case an unforeseen event happens –– when your car breaks down, you need to make a sudden trip to the hospital, or when you suddenly find yourself in between jobs. If you do not have an emergency fund yet, create one now.