As the story about the ant and the grasshopper has taught you in grade school, working hard while you can is your best answer for the “rainy days.” These can be anything from downsizing, an accident that incapacitates you, or just you reaching the age when you can’t work anymore.
But working hard for the money may still not be enough to secure your future. Financial planning for retirement or for unforeseen circumstances might also be needed. But how do you go about it? Here are a few things you can do while you’re still in your most productive years.
Save for your retirement
One way to achieve financial security in your advanced years is to start preparing for it now, never mind how old you are at present. The easiest and simplest way is just to save a portion of the money you earn on a monthly basis, treating it as one of your regular expenses like utility bills or mortgage payment. This way, you will force yourself to allocate the amount.
Keep your debts under control
Because you really don’t know what’s going to happen in the future, making sure you can pay off debts even when you stop earning on a regular basis should also be a priority. This is especially important when you’re nearing retirement age, as it will be one less thing to worry about and more time and opportunity for you to enjoy the fruits of your labor. Better yet, pay off debts as soon as you can!
Invest, invest, invest
It’s nice to have your cash stashed in some old, tin box under your bed, so they’re always at the ready when needed, but it’s better if you make your money earn for you. That means having a portfolio of different holdings that are conservative and aggressive. The latter will make more money for you while the former is your insurance should a downturn happen, and your aggressive holdings are recovering.
Get some insurance
Depending on what your situation is at the moment, there is an insurance policy that can suit your needs:
- Payment protection – will cover your debts if you can’t pay them yourself due to illness or downsizing.
- Short-term income protection – you will receive a monthly sum over a specific timeframe in case you can’t earn money because you got sick or laid off.
- Life insurance – the most common protection that will financially support your family in case of your untimely demise.
- Critical illness protection – as the name implies, it helps you financially should you get sick.
Losing the ability to earn money is always a life-changing experience. Making sure that you are covered as you adjust to the new reality should be a priority.