Should you start emergency fund or save for retirement? Have you think what to Prioritise first?
For some people, putting away enough money to go on a vacation is the ultimate luxury. For others, dining out once a week or getting a monthly pedicure is a real treat. Whatever your lifestyle, it’s important to understand how to get the most from your money so you can live comfortably and within your means. It’s Hard to know how to prioritise your financial Goals.
Personal finance is always personal, so there isn’t one answer for everyone. Most of us severely underestimate how much we need to save in our daily lives.
Here are some tips how to rank your financial goals:-
1. Retirement comes first:-
We putting retirement at the top of your priority list of just because Retirement is the number one financial priority for pretty much everyone for three reasons:
Inflation causes the value of every dollar to shrink year after year, so by the time you retire, you’ll need much more money every year to live than you currently live on now.
We’re living longer than ever and health care costs are rising, so we need to save up to take care of ourselves for a longer period in retirement than previous generations did.
Today’s retirees can rely pensions. But we won’t be able to. Pensions are becoming much less amount it’s up to us to save what we can for retirement.
2. Keep Track of your financial:-
Many personal finance and budgeting tools are mobile, and allow you to track where your money is going. You can make smart financial decisions such as whether or not to join that after work happy hour. Budgeting is flexible. You can always shift your priorities, saving some of those wants and needs for next month.
Debt may be third on this list, but that doesn’t mean it’s not a high priority. Yes, it comes after retirement and Tracking of your financials, but it also comes before your Lifestyle Choices spending. That means that every month, you make your debt payments before you, say, buy a new phone or that Thanksgiving plane ticket home or the new work shoes you need. Why? Because debt is a huge burden, and because–in the case of credit card debt–your debt can grow. For that reason, when you tackle your debt, you should:
First work on paying down credit card debt over other kinds of debt.
Among your credit card balances, pay minimums toward everything but your highest-interest rate debt. Put as much as you can toward that.
Once that is paid off, prioritise your next-highest interest-rate debt. Non-credit card debt, such as from student loans, is lower in priority than credit card debt because the amount does not increase the longer you hold it.
4. Maintain an emergency Fund
You never know when your car might break down, when you’ll need to take time off from work for family issues or your AC will begin to leak. It’s important to be prepared for life’s unexpected turns by having an emergency fund to tap. If you have three to six months of expenses saved up, you can avoid taking on debt. If you don’t have a fund, start saving now. When something goes wrong, and it will, you won’t have to reach for your credit card or take out a loan to cover the cost.
6. Be Reasonable
Don’t plan your budget that you will never be able maintain just like diet or exercise program, it is always important to have realistic budget. If you are not able stick to your budget plan or not able to save, don’t expect to have a change overnight. Instead start setting small goals that you can achieved and you can build the confidence to tackle bigger changes down the line
If you follow these tips, you can easily create a liveable budget that will help you achieve financial peace of mind. If you find any difficulty in ranking your financial Priority Consult your financial Advisor.
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