Wednesday, July 15, 2015, AM | Leave Comment
Life’s pitfalls are all over the place. Some pitfalls have to deal with relationships. Other pitfalls include the loss of a job or family number. But some of the most difficult pitfalls involve financial stability because they almost always tie into the other pitfalls of life.
Financial difficulties can arise when you lose a job. There seems to be a great number of people searching for a limited number of positions nowadays. Or they can arise from ending a relationship by cutting your financial household income in half. Simply put, it’s difficult to be financially stable in today’s world.
But there are ways to ensure that you’ve prepared yourself for these pitfalls that life throws at us. If you’re ready to start preparing for life’s pitfalls, follow the tips below and you’ll be setting yourself up for a lifetime of financial happiness.
Become Financially Literate
You wouldn’t take on a mortgage without understanding what you’re getting yourself into, would you? Or how about even lending someone money without a plan to pay you back or starting a new job without knowing what your job duties would be? You wouldn’t. So why would you ever invest your hard earned money into something that you don’t understand?
Becoming financially literate is an important step in funding yourself in the future when life’s pitfalls occur. Take the time to about money management and the options you are investing in before you put your money into a venture. Completing thorough research on any financial and investment decisions is a sure fire way to reach any financial goals and helps to eliminate mistakes.
Research has shown that the more financially literate a person is the more wealth and opportunity an individual has than those who are not as literate. Take the time to establish yourself as a knowledgeable person in personal finance to make the right decisions to fund yourself for the future.
Establish an Emergency Fund
One of the easiest ways to fund life’s pitfalls is to set up an emergency fund. An emergency fund is an accessible savings account where you can keep extra cash on hand for real emergencies. It’s often recommend that this fund contain enough cash to cover at least three to six months of all expenses.
This should be a top priority in establishing a fund for life’s pitfalls. An easy route to ensure that you don’t slack on deposit into the emergency fund is to make sure that the fund is the first payment you take out of each check you receive.
If possible, it’s even a good idea to establish a direct deposit of your paycheck into the account and only remove the money needed for expenses. This forces your mind to make a tougher decision when pulling the money out because it has already been placed in the emergency fund.
Invest, Invest, Invest
If you couldn’t tell from the subtitle, another easy way to fund yourself for life’s pitfalls is to invest. Some like to invest into a 401(k), some like to invest into a Roth IRA, some into stocks and others into tangible items such as land. It all depends on the person and what fits their profile best.
For example, some people may want to invest in raw land in Texas through a loan because it benefits them in a number of ways and gives them options down the road. The land could potentially be sold for development, for farm land, for the use of its natural resources, and much more. That may work for one family where investing into a Roth IRA might work for another.
No matter what you invest in though, make sure you have followed the first tip and become financially literate.
Anica Oaks is a Freelance writer and web enthusiast. Read some of her published work on her Google+ page.