We live in this current society that has moved to embracing immediate gratification. Who wants to wait to buy something, or have an experience, when you can have it now. Consumerism is one aspect that has led us to this idea along with the ease of obtaining and using credit. If economic growth and no crisis was guaranteed, then this might be a model that could be sustained. However, as we are currently experiencing both, a healthcare crisis and an economic crisis, economic growth and absolute safety cannot be promised.
Currently, the majority of American citizens are experiencing financial burdens and hardship due to the crisis, but also due to the lack of planning for the future and huge debt. This brings me to the topic of this post; plan for the future. If you have not, start now to plan for the future and preparing for unforeseen emergencies by creating a budget, getting out of debt, creating an emergency fund, and saving for retirement.
Creating a budget is simple and all households should employ this. This is how it works. For each pay period, whatever the frequency might be (weekly, every other week, monthly etc.) write down your income after taxes. Underneath, list your expenses for that pay period. Be as detailed as you can be for every bill, rent, insurance, groceries, fuel, medical etc. The very first thing that you should ensure that you subtract from your budget is 10 to 15% for savings. The money that you have remaining is yours to invest or spend however you like. A exemption to this is if you already have credit or vehicle debt. If this is the case, you would, instead of using your remaining money for entertainment, you would put it all towards paying off debt.
Continue putting 10 to 15% into your emergency savings until you have enough to live off of for 4 to 6 months in case of an emergency. After you have created your emergency fund, begin to put the 10 to 15% into your retirement. There are many options when it comes to saving and investing in retirement. I am no expert at this, but with research you will be able to make good solid decisions on the course of action you want to take.
This advice that I have provided is simple, but so important. Let’s all work to get out of debt and prepare for the future.