This is a guest post by William Masters.
In life, some things are inevitable. And so everybody blessed with the gift of old age will eventually have to face the consequences that come with it. At the same time, this doesn’t mean you shouldn’t do everything in your power to prepare yourself for the future so as to make the inevitable more agreeable. Living a healthy life is one sensible precautionary measure and holds the additional benefit of not only protecting you against many illnesses and diseases, but of making you feel better to boot. Drawing up an appropriate, in-depth financial plan for both health and old age is another. The latter especially is a serious step which you ought to follow irrespective of your current income. Let’s find out at what you should be looking at in particular.
Proper Banking is a Priority
You’ll be able to handle your finances better if you avoid spending all the cash you’ve earned without putting some of it aside as a reserve. There are numerous banks and financial institutions offering banking services suitable for your income. The first step is to open a bank account with a trusted bank or financial institution. This may sound trivial, but there are indeed thousands of unbanked in the UK, to whom any help with their banking is highly welcome. If you, too, don’t as yet have a bank account, there are two sensible options at your disposal: If you’re setting up a savings account at a regular highstreet bank, you’ll enjoy the benefit of generating some interest on your money. If, instead, you’re opting for a guaranteed bank account, you’ll be able to reduce your debts quickly and avoid racking up new ones.
Regardless of your choice, you’ve just taken a major step forward on how to prepare for age and illness financially. Though it does involve making sacrifices – many current accounts are burdened with high costs and a guaranteed account carries a monthly fee – its good fruits shall always remain to be seen should you fall ill or grow old. Most of all, you can remain certain that your many years of hard work are not brought to naught by theft, fraud or ill fortune.
Drawing a Proper Budget Is a Must
On the one hand, there are many people who refrain from indulging in pleasure just to save. On the other, there are those, who will spend recklessly without thinking about the future or the consequences of their actions. What this explicitily does not mean is that you should never celebrate or have fun. What it does show is that there is a need for balance as well as drawing a proper budget. Effectively, you need to set up a financial plan that limits what is to be spent on a particular project.
As any expert will tell you, sketching a suitable budget is the secret behind making a substantial saving for the future. Old age can, therefore, never be frustrating to an individual who’s made a deliberate choice to save when there was still time. At the same time, individuals can access proper health care in case a disease strikes. While these facts are undisputed, the question of how to actually set up a workable financial plan is often quite difficult. And yet, there is no reason to despair.
If you want to find useful information on how to beat debt and financial problems in preparing for a better future, you’ll find plenty of inspiration on the blog of Gail Vaz-Oxlade as well as in her book Money Rules. Vaz-Oxlade’s contribution to the debate is important, because she underlines the importance of personal responsibility – but also offers a plethora of tips on how to use it.
Additionally, we’ve also compiled some recommendations from around the web to help you get started.
How to do it
If you’re interested in diving deeper into the topic, there are various online resources at your disposal. For the website about.com,Miriam Caldwell has divided the process of setting up a financial plan into five different sections:
- Budget Successfully
- Eliminate Your Debt (e.g. by switching to a guaranteed bank account)
- Build an Emergency Fund
- Save for Retirement
- Invest and Diversify
For the same website, Jeremy Vohwinkle has sketched out a seven-step plan, which includes useful ideas such as gathering every financial statement you can, breaking expenses into two categories – fixed and variable as well as reviewing your budget on a monthly basis. This is a highly recommended read for anyone looking for practical suggestions on how to make things work.
If you want to get to work straight away, the Commonwealth Bank is offering an excellent template for a financial plan straight off their website. Although it is principally aimed at small businesses, it does a great job for private households as well.
By keeping these aspects in mind, you can considerably improve your finances and prepare yourself for a great life in old age. Some things in life may be inevitable – but by taking the right steps even the inevitable can be great.
Currently reporting directly from London’s financial heart, William Masters is a journalist specialising in economics and personal finances. In his writing, Masters deals with prepaid card technology, the development of the banking market in the early 21st century as well the effects of online technologies on the finance industry. This article was written in association with financial service provider www.eccount.com.
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