Frugality isn’t just a preferred way of life. For some, it is essential to continue living within your means. That doesn’t mean you can’t still enjoy things in life or even afford to buy the finer things. But it does mean you should be taking care to keep your finances healthy. This means careful monitoring of your accounts each month, and planning for the future by budgeting today. Here are just some of the most important financial aspects of your life that you need to keep healthy:
The consequences of failing to keep up your mortgage repayments can be devastating. The bank can choose to foreclose and literally take your property from you. This could leave you and your family homeless. Of all the loans you might need to take out throughout your life, anything secured on your home has to be handled carefully.
If you’re finding the repayments are sucking you dry, then don’t be afraid to shop around for a better deal. Some mortgages have a minimum term with the lender. This means you might incur a leaving fee if you settled it early to move to another lender. Check your current contract. Look for smaller interest rates but also check the total amount repayable over the life of the loan. Finally, make sure your monthly repayments are affordable.
Other Loans And Debts
It’s so easy to get into trouble with borrowing. Even if you’ve taken on a 0% interest loan, you must make the repayments. But life changes and that can affect your income. If you’re stretched too thinly, you can easily miss repayments. That’s when creditors can get nasty.
We might be talking about healthy finances, but your mental health can suffer when money is short too. This is especially true if you become the victim of a nasty debt collection agency. They send threatening letters and even come banging on your door. If this happens to you, talk to a consumer defense attorney because what they’re doing might be against regulation and even the law. Nobody deserves to be treated like that.
Generally speaking, it’s best never to borrow or use a credit card you can’t clear each month. In reality, we can’t always avoid it. Life gets in the way of our good intentions! Prioritize repaying and clearing these loans over savings. Loans often cost lots of money, whereas savings earn very little. You might even use your savings to save you interest payments.
Your Child’s Education
Every parent wants the very best for their child. Above all else, they want their child to have access to opportunities that will benefit their future financial well-being. This includes a good education. It doesn’t matter if they don’t use that college fund for college. If they don’t have it there, then they won’t have the choice.
Of course, your continuing professional development is important too. And who hasn’t contemplated a career change later in life? Having a fund to fall back on to further your own education can make an enormous difference to your career prospects.
Nobody wants to work to death. At least nobody wants to have to rely on employment to pay for the basics when they’re in their eighties or nineties! A pension fund should be good enough to cover your basic cost of living when you’re ready to retire. For many of us, a pension is a luxury item, but it shouldn’t be. Even if you’re wary of pension funds, have some sort of investment that will guarantee you at least three decades of income to cover your later years.
Your Emergency Savings
The emergency savings pot is there for emergencies. Your boiler might break down, a window could get smashed, or a storm might take your roof away. Having a pot of cash to cover any occasion is essential. You might only be putting fifty dollars a month into it, but over the years, this will be a sizeable fund to cover any emergency. Put it into an instant access savings account, so it doesn’t lose value over time.
Your Household Budget
Life changes all the time. That means you should be scrutinizing your household budget at least every quarter. Keep each of your savings pots topped up so you can save in advance for the monthly, quarterly, and annual bills. Always shop around for a better deal each time a contract is up for renewal. This might include your phones, your TV subscriptions, your internet and your insurance policies. Don’t forget to check where else you can cut costs each month too!