Nobody can see ahead into the future, but a prepared person can make an educated and informed guess at the possible outcomes which might be waiting on the road ahead. The key to expecting the unexpected where your finances are concerned is to prepare for numerous eventualities and ensure you always have some form of safety net ready to catch you, whatever crazy situations the future might throw in your direction.
We all wish we were more in control of our finances, and there’s always that lingering worry about our heads about how to safeguard our earnings, but if you can follow some simple steps towards keeping a level financial head, then those worries will slowly wash away. There are ways to genuinely protect yourself against all manner of financial troubles or tricky future situations, and I’m going to talk through the steps you should follow if you want to look after your money today and tomorrow.
This might sound like an obvious piece of advice, but so few of us forget to do it. I’m talking about planning far beyond the end of this month. You might have ensured you’ve put aside money to pay for the rent on your flat, but there’s every chance you have no idea what you’re going to do when you want to move out of that flat and buy into a proper home that you can call your own. Making steps now to make that process easier and ensure you don’t incur debt is very important.
Thinking even further into the future, you might want to consider Blueprint Wealth’s SMSF division if you want to put your money towards a better retirement. It’s never too early to start planning because doing so today just means that things will be easier tomorrow. If you’re going to take out a big loan to afford the car or the house you want, you need a good credit history, so you might want to think about ways you can improve your score. An example would be that, if you borrow money, you should pay it back quickly. This is a good way to prove your trustworthiness and improve your credit rating.
Watch your expenditure.
I’m not saying you can’t buy luxuries. That’s the point of life; it has to be lived, and we have to allow yourself to enjoy the fun things waiting for us out there in the big, wide world, otherwise there’d be no nothing for us to work towards or no reason to earn money other than to pay rent or utility bills. Still, you need to be monitoring your expenses.
As I mentioned above, there will come a point in your future when you need to prove your trustworthiness in order to get loans to pay for important things or, in some cases, to get a good job. You need to prove that you’re a sensible spender in order for that to happen, which means you need a good credit history. If you have a history of your expenditure exceeding your income, due to excessive purchases of luxuries, then you’re proving that you don’t pay off your debts and you might struggle to find a loan.
Financial preparedness is about having a plan B. If you start building an emergency fund today, then you won’t need to worry about debts incurred from excessive expenditure. It’s good to borrow money to build a reputable credit score, of course.