Money Sense: Preparing Your Finances for the Future

You’re young and carefree, but believe it or not, this is the ideal time to be planning for your future! The earlier you start making arrangements for your future retirement and health needs, the better prepared you’ll be. The current economy alone should be enough to get you motivated to start saving.

Retirement Savings

You’ll likely be working for quite some time, which makes it seem as though you don’t need to worry too much about retirement saving. That’s horribly wrong. The more you save now, the less you have to worry later.

Saving money in your twenties and thirties hugely compounds over time and a dollar saved now is worth quite a bit more than a dollar saved in your forties or fifties. Start a 401K if you have that choice at work or invest in an IRA or Roth IRA. Discuss your plans with a financial planner to see your options.

Life Insurance

You may not have thought much about it, but even if you don’t have any dependents, children or spouses, you should still arrange to have some life insurance. If you don’t, when you die your family will bear the costs of your funeral arrangements and your debt will follow your family as well for a while.

Buying life insurance now is very inexpensive as well, and most working individuals have some sort of coverage at work – look into what your benefit package covers to see if you need any additional retirement savings.

Living Expenses

If these recent years of economic troubles have taught us nothing else, learn to start saving money for a rainy day. Layoffs happen and when they do you’ll be glad to have three to six months of basic living expenses in your bank account.

Saving this money can be easy – just send 10 percent of your paycheck to a savings account every month that you’re working. Over the course of the next few years, you’ll have a nice nest egg built up for your peace of mind.