Bucket lists of all types are great. They inspire people to do more to reach specific goals over a lifetime. A bucket list of the financial kind is the best because it teaches and motivates us to manage our money and cash flow better. What’s a better way to set yourself up for retirement?
To start a financial bucket list, the framework should consider three important factors in financial planning:
Remember that these three are interrelated: what you don’t spend, you save. And what you save, you should invest. Pretty simple, isn’t it? Another vital component is your actual goals and the time frame you’re giving yourself to achieve them. What do you want to achieve and when? Obviously, everyone wants to be financially stable by the time they retire.
If you’re not too sure what to include in your financial bucket list, here are some financial milestones you should consider adding.
1. Aim to be free from debts.
Who has not tried incurring debt? Even the richest people on the planet have at least one debt waiting to be paid.
You see, not all debts are bad. Bank loans that go into different types of investments will eventually pay off. What you should watch for are bad debts. One example is the growing credit card bills you've been neglecting. Try to pay more than the minimum fee.
If you can’t curb your reckless spending, cut off your card and pay your debt in full. As much as you can, aim to be debt-free.
2. Have a three-month emergency fund.
There’s a reason why being debt-free comes first. Any extra income saved can easily go into your emergency fund that will help cover unforeseen circumstances coming your way.
Three months’ worth of your salary is a safe amount because this means you’ll have money to spend just in case you can’t work or have an income. It will tide you over while you’re recovering.
Keep your emergency fund in a bank account so it can also earn a bit of interest over time.
3. You have multiple investments.
Saving your money in bank accounts is not enough. You must find a way to make it earn for you and you can do that via investment.
One way to invest is via VUL insurance like FWD Set for Life. It’s a plan that allows you to have both insurance and investment. You have life insurance to protect your family financially and you have an investment component that you can put in different funds of your choice. You can hire professional fund managers to do the legwork for you.
Another way to invest is via mutual funds. It’s a pooled fund that, again, professional fund managers control. It’ll be up to you which fund you want to invest your money in.
There are other types of investments like government and corporate bonds, time deposits, and UITF. It will be best to talk to financial advisors who can tailor-fit your investments to your needs.
4. You have a retirement plan in place.
It’s heartbreaking to see senior citizens still working due to a lack of proper retirement planning.
Do you think you’re too young to be considering retirement? There’s no such thing as being too early. In fact, the early you start, the better nest egg you can build for your retirement days.
As early as now, think about your sources of retirement funds. Is it sustainable? Will it be enough for your needs and lifestyle? Think about your future expenses and compare that with the retirement amount you’re targeting.
5. Critical illness insurance has you covered.
Believe it or not, this type of insurance has become quite a necessity nowadays with people getting diagnosed with cancer and other critical illnesses, left and right. And it knows no age now. You can be diagnosed at any age.
The unpredictability of getting sick with critical illness is the reason getting protection is necessary. Treatment costs and medicines can drain your savings in an instant. However, critical illness insurance will help stave that off.
FWD Set for Health, for instance, lets you claim three times for three unrelated covered critical illnesses, so you don’t have to worry over where to get money for your treatment. You can just concentrate on getting better.
6. Try for some real estate.
Another item that should be on your bucket list is real estate. As an investment, real estate is stable. It rarely depreciates. As an asset, it’s a good thing to have. You can use it, sell it, make it as collateral.
There are several more items you can include in your financial bucket list. After all, this financial plan should reflect your context and your goals. However, these six are the ultimate ones and, as much as you can, these are the ones you should prioritize.
They’re not easy to accomplish, but hey, it’s not called a financial bucket list if they’re all so easily achieved, right?