There are many things we can do in life to be ready for unanticipated expenses.
But what about anticipated expenses. The things you can depend on regardless of age.
You can depend on the need to eat, the need to be healthy and the need for a place to live. Depending on where you live, you’ll probably need some type of transport, whether a bike, car or public transport.
These are things you can expect to pay for .
How can you be ready for the easy to anticipate expenses? How do you prepare?
1. Start early – the best way to be ready for anticipated expenses as you age is to get started saving early.
2. Live within your means – modern marketing convinces us we really won’t be happy if we don’t have the most recent gadget or the best clothes or a the nicest furniture or the best car. Hogwash. Happiness is not about what we have, it is about who we are (which is an entirely different post to write).
3. Save (something) always – It doesn’t have to be much, but if you build in savings for future needs from your earliest job experiences, you are developing a habit that will pay off (literally) handsomely in the future (it’s called the time value of money). As this article points out, 40% of Americans have less than $500 in savings.
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4. Know where your money goes – too many people don’t have a clue about where they spend what amount. It’s hard to hold on to your money if you are clueless where it goes.
5. Establish a budget – after you track your spending and have a real sense of your financial situation you can establish a budget of your priorities.
6. Stick to the budget – See numbers 2 and 5 above. If you don’t stick to the budget, things will fly off the rails quickly.
7. Assess opportunities regularly – sometimes we are so wrapped up in the day to day of life and living that we miss significan opportunities to improve our financial situation. Keep your eyes open. Develop a sense of value.
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8. When you buy anything over $200, always ask for a discount – I learned this decades ago from my brother in law. I haven’t always practiced it, but it is good counsel. And it works! When is the last time you asked a store to give you a discount on what you buy from them? The worst they can do is say no. If you don’t like it at the price on the ticket, walk away.
9. Pay yourself first – once you go to work, set aside savings automatically. Have direct deposit for a portion sent to savings. If you never see it, you won’t miss it.
10. Borrow, don’t buy — I’m not talking about everything, and I am certainly not suggesting you abuse your friendships, but to the degree you are able to, borrow the items you only need to use infrequently. Or, if you enjoy reading or watching movies, borrow items from your local library. This can save you a great deal of cash along the way, which you should put into savings rather than thinking about how to spend it.
Do you have some suggestions on how to avoid going broke? Why not share them as a comment?
Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net
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It is a shame that people don’t understand point 2 very well. Maybe we should say Calulate what your means are and live within them!
Savvy Scot recently posted..10 Crazy Safety Facts You Never Knew
Well written article! really very useful post to everyone and thanks for sharing with us.
If we just follow these tips at any point in our life,this could be the start of an awesome journey to save big and stay away from going broke. Living simply and within your means is a great principle, and very basic. I have no doubt this is a good place to begin our trip to riches.
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Not sure the end of the trip will always be riches, but it will certainly be something better than broke!
“Ask for a discount” — this one is awesome and I find usually works! My wife fell in love with this furniture thing (I still dont know what it’s really called) that was $250…which was WAY more than it should’ve been priced for, I thought. She’s usually so so so good with money, this was her one ‘splurge’ of the year, and so I agreed. But when we got up to checkout, the first thing outta my mouth was, “Yeah there’s a scratch on top, we’re not paying full price.” (there was a scratch on top, by the way). Manager came over, nodded her head and we were down to $175. Always ask for discounts on big purchases! (or any purchase with a scratch/dent/rip!)
TB at BlueCollarWorkman recently posted..Road Rage With a Gun — The Verdict