Many people want to feel financially prepared for the unexpected. More and more people are interested in learning about saving, budgeting, and investing in order to more adequately protect their families.
Take a look at the checklist below to find out how financially prepared you are:
1. Make More Than the Minimum Payment on Credit Cards
Even if you’re on a tight budget, it’s important to pay a little bit extra each month on credit card bills. This can drastically change the length of time you will be paying off the card.
2. Having R700 000 or More in Life Insurance Coverage
A life insurance policy is a necessity. The death benefits from life insurance are often used to pay for burial and final expenses, replace income of the individual who has passed, or to pay off a mortgage.
3. Saving Every Month
Save money every month even if it’s a small amount . When you get into the habit of gradually and steadily setting aside money each month, you’ll be surprised how much it adds up over time.
4. Investing some of your savings in accounts other than cash
Investing is an important part of your overall financial plan if you want to accumulate money more rapidly than one would in a traditional savings account. It’s a good idea to earmark some of your savings to be put into equity markets, such as mutual or index funds to create the potential for higher returns on your money.
5. Savings to Cover Three Months of Expenses
Having at least three months of expenses saved for emergencies is critical to overall financial well-being. This is not only useful when you unexpectedly become unemployed, but also when a major appliance breaks down, or a medical bill needs to be paid.
It was also help you to avoid falling into the debt-trap since you won’t need to use credit.
How do you rate on the scorecard?
Source: The Simple Dollar