3 Money Tips You Shouldn’t Ignore – Regardless of Your Income

Mon, Dec 16, 2013

Financial Advice

If you are young or don’t have a lot of cash, your financial situation may be nothing to brag about. And because of age, you may feel that you have plenty of time to worry about important money issues. However, time moves swiftly and the decisions you make today can impact your financial future.

You can easily wait until next year or the year after to take a serious look at your finances. But there are certain aspects of your financial life that you should not ignore – regardless of your income level.

Do you have a savings account?

Nowadays, disposable income is a luxury for middle Americans. And if you live paycheck to paycheck, saving money might be the last thing on your mind. But regardless of how old you are or how much money you earn, saving money should always be a priority.

Which isnt isn’t hard to save when you’re cash-strapped. But any effort you make to build a rainy day fund can determine how well you’re able to manage in a financial crisis. Think about this, without an emergency savings account, it might only take one financial mishap to cause your home to go into foreclosure. And while financial experts recommend a nest egg of about 6 to 8 month’s of income, you may do fine with a nest egg of only three month’s worth of income.

How is your health coverage?

You may choose a health plan that doesn’t offer the best coverage in order to reduce your monthly premium. Understandably, you have to do what’s best for your budget. But if you’re able to get better coverage, the extra cost is worth the protection. With better health insurance, you’ll pay less for doctor visits and prescription medications, which can be cost-effective if you have a variety of medical ailments and visit the doctor often.

If the cost of health insurance triggers payment shock, reevaluate your monthly budget. Perhaps you can reduce how much you spend in other areas.

Do you have life insurance?

You may skip life insurance if you’re young or if you don’t have a lot of extra money. To some people, life insurance is optional or only beneficial to those who have families. But even if you do not have children, you may have a spouse who will greatly benefit from the financial help in the event of your untimely death. And if you’re single, a life insurance policy can provide funds to help cover your burial, plus pay off any debts you may have.

It can be difficult to determine the right coverage. However, “instead of focusing on a specific coverage level, you should be focusing on the amount of money your family will need upon your death, including how much they’ll need to maintain their expected standard of living for some time to come,” says Jon Fritz of SILI.

These money moves only scratch the surface, as there are a variety of other things you should do with your money regardless of income or age. For example, have you started planning for retirement? Understandably, your knowledge of personal finance and money-management may be limited. But if you work with a financial planner, this professional can get your money on track and help improve your financial outlook.

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