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Apr 8

6 Things You Must Save For if You Don’t Want To Ever Feel the Burden of Debt  

Posted by at 20:17 | Default | Comments(0) | Reads(1806)

The choices you make with your finances could inevitably lead to a successful financial life or an unsuccessful one that is full of debt.
Most people who succeed to get out of debt using debt consolidation usually uphold the importance of savings. They will often cite in their debt consolidation reviews how they have started saving money so as not to be reliant on debt.

It is sensible to start saving because your situation might change in the future and you could find yourself unable to afford things the things you currently afford.

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There are 6 main areas in your life that if you don’t save for, will propel you toward taking debts. They include:

1.  Emergencies http://moneyfor20s.about.com/od/budgeting/g/emergencyfunds.htm

Unforeseen problems will always occur even to the smartest money managers. For this reason, it’s critical to have an emergency fund to deal with those emergencies. Your emergency fund should be able to last you not less than 6 months.

Your car might develop a serious problem that is expensive to repair. You could also develop a medical complication not fully covered by your insurer or you could lose your job.

In addition to building an emergency fund, having a good insurance cover in place will help you to deal with any health problems, theft and damage to your home.

2.  Retirement http://moneyfor20s.about.com/od/yourretirement/tp/retirement_savings_goals.htm

Retirement always seems so far to most, especially to those who are still under forty. There are even those who fail to save for their retirement until their last working years.

Life expectancy is very high today. This means that you could live a healthy life many decades after your retire.  As such, you need to put away enough money to last you for the rest of your life.

Though your employer is by law required to contribute to your retirement fund, you should add to that contribution or open a separate fund of your own.

If you don’t save for retirement, you won’t have enough money to sustain you and this will encourage you to start living on your credit cards.

3.  A house http://moneyfor20s.about.com/od/financialrules/ht/buyahome.htm

When you are buying a house, it becomes very expensive for you to get a loan if you have not put any money down.

Your loan will attract higher interests if you have little or no down payment. A high interest will lead to a bigger debt obligation.

4.  Entertainment

It is crucial to set aside an entertainment budget if you don’t want to start using your credit cards for your entertainment needs.

Every time you charge entertainment bills on your credit card, you are incurring debt that does not add any value to your life.

5.  A car http://moneyfor20s.about.com/od/moneyinyour20sbasics/ht/howtobuycar.htm

If you don’t save to buy a car, you will end up buying one with a loan and paying interest for it, which does not make sense as cars depreciate in value.

6.  Education http://moneyfor20s.about.com/od/studentloanalternatives/tp/studentloanalternatives.htm

If you don’t save for your education, you will need a loan to get your college degree. As college loans are big amounts, you will end up paying for student loans most of your life.

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