Often when we are young we don’t know how much things really cost, we might know we have a lot or a little, but until we move out of our parent’s home, we aren’t always sure of the price of much.
Life hits you thick and fast with costs like taxes, education, cars, homes, and more. And when we get to grips with how much things cost, we might think – we need to save.
Savings are good to have anyway so that you can buy the things you really want, or cover the costs we might not be expecting.
So if there are three things that you should be saving for, what might they be? Of course, what we should save for might vary from person to person. Personal circumstances as we grow will typically dictate what we need and why.
But here are a few things to add to your list:
Unemployment
It’s big, and it can be scary too. Unemployment can happen to anyone at any time because we never know what is going on with the companies we work for. Sometimes we might catch wind that things are going south, and we can make the right steps. Applying for new work and moving elsewhere.
Other times it is out of the blue and the job market can be competitive and unrelenting.
Saving for a period of unemployment might feel like tempting fate, but in reality, you are giving yourself the best safety net possible.
How much you need to save will depend on your circumstances. Try to think of it like 3-4 months of rent or mortgage payments, utilities, and food. The more you stack up, the easier any period of unemployment will be. And, if you never needed it by the time you hit retirement – it’s free cash.
Retirement
Speaking of retirement, eventually, most people will retire. It might be due to illness, old age, or you just hit the point in life you are ready to take it easy. No matter what your retirement will look like, it is wise to save for it.
The earlier you start a retirement fund, the better, and you should make sure you take advantage of all of the pension and retirement plans you have available through work or through the government.
Part of your retirement planning will also include funeral planning – so that you can do it and know that it is taken care of. You are leaving your loved ones the space and time to grieve and simply follow your wishes.
Disasters
No matter how careful you are in life, disaster will eventually strike. And when it does, you’ll likely need money to clean up the devastation. Things can and do go seriously wrong, so you need to be prepared.
For instance, suppose you need to take someone to court because they injured you. For this, you’ll need money to support yourself if you can’t work, even if your law firm will eventually recover the costs for you from the other side.
You also need disaster money for things like car accidents, health emergencies, and even natural events, such as flooding, if your insurance doesn’t cover you. You never quite know when these problems are going to strike, so it makes sense to always be prepared.
Education
It might be that you want to learn something new or retrain eventually – or it might be for the younger members of your family. Education often comes with a hefty price tag, and because of that, it is always worth putting money aside to try and help out those in the family that are younger than you.
Although there are grants and loans, the more money that is available to help the better.
Saving should always have a purpose – so that you or your family can benefit from your efforts and hopefully carry on that care for the family that comes after them.
Or maybe you have something with four wheels and some speed behind it in mind. In this case, check out: 4 Considerations When You Buy Your First Car.
BY TECHIE MAMMA