Money itself certainly isn’t the most important thing in the world, but it’s closely tied in with pretty much everything in life, and obviously not something you can afford to ignore. If you’ve recently come out of debt, or that dark cloud’s still hanging over your head, you may be wondering about the best way to achieve greater financial security for you and your loved ones. Here are three practical pointers for doing this…
Have a Safety Net
Unless you’re the luckiest person on earth, bad things are going to happen in your life. There’s no getting around this fact. When these things occur, having a financial safety net in the form of emergency savings can make all the difference to how you ultimately come out of the situation. Most financial advisers say that people should have an emergency fund equal to six months’ income in a savings account. Obviously, it can be hard to come up with this at a moment’s notice! You can build your financial safety net faster by taking advantage of any matching funds plans offered by your employer. Many workplaces will match your investments in certain accounts cent for cent, meaning you get an 100% return right off the bat!
Invest and Diversify
Once you’ve rubbed out your debt and built an emergency fund, you should start considering other types of investments. There’s a wide range of different investments you can leverage, each with their own benefits and drawbacks. Penny stocks are popular with a lot of beginner investors, as their prices are very diverse and securities can be bought and sold with relative ease. What are the best penny stocks for day trading? The answer to that question has probably changed dramatically since this article was published, so unfortunately, you’re going to have to do your own research! Regardless of where you put your money, remember that all investments can be very volatile, and will go up and down according to the number of buyers and sellers there are at the time. This is why diversification (spreading your money out over different vessels) is so important. Remember, you should never invest more than 10% of your available assets in a single security.
Fulfill your Responsibilities to your Family
We saved the most important point for last. Financial security isn’t just about lining your own pockets. You also need to ensure that you’re looking out for the finances of your partner and your kids. You’re not the only one in this boat. If you’re the main breadwinner, and something were to happen to you, like losing your job or becoming disabled, you need to have a plan in place to make sure your family will be alright. Aside from your emergency fund, which we’ve already covered, you should also have good medical insurance, life insurance, and disability insurance. Hopefully, you’ll never need to carry your family in the event of a massive personal catastrophe. However, disaster does strike, being prepared can make a huge difference to the people who matter most.