How Much Life Insurance Do I Need To Achieve My Goal?
How Much Life Insurance Do I Need To Achieve My Goal?. What financial objectives do you wish to achieve this year? Here are some top priorities to set for yourself that will have a significant impact on your financial situation in the future.
1. Reduce your expenditures.
According to a survey conducted by McKinsey and Company, four out of ten Americans do not expect their financial situation to improve as a result of the impact of COVID-19 until late 2021 or 2022. More and more people are looking for ways to make do with less and where they can minimize costs.
The advantages of lowering your expenses are self-evident. You’ll need to either make more money or spend less money in order to have enough money to tackle larger financial ambitions. Regularly monitoring your expenses and making adjustments will help you maintain your budget’s viability and avoid debt accumulation.
It’s not always easy to cut back on spending. Whether it’s due to peer pressure, a desire to pamper yourself, or the need to pay for an emergency, expenses happen and might cause you to lose track of your goals. Here are some things you may do to ensure that you achieve your goal:
Reduce the number of subscriptions. Make more informed decisions about your subscriptions, such as entertainment streaming services (we’re looking at you, Hulu, Disney+, and Netflix). Reduce the number of subscription options per service type to 1-2 per service type.
Make a note of it. Schedule an appointment on your calendar at a specific time every month to review your spending. This includes expenses such as subscriptions, groceries, and automatic refill orders placed through websites such as Amazon Prime and Chewy.com. If required, make adjustments to your financial plan.
Get yourself an app. Make use of budgeting software such as Mint or You Need a Budget, which may assist you in organizing and tracking your specific budgets, sending out notifications for excessive spending, and monitoring subscription fees to save even more money.
Bills should be negotiated. Examine your monthly bills, such as your auto insurance or cell phone service. Inquire with your service providers to see if they may provide you with discounts or cost reductions on your current contract. If this is the case, compare their prices with their competitors.
2. Begin a second job as a side hustle.
According to a survey conducted by Upwork and the Freelancer’s Union in 2019, about 57 million Americans worked as freelancers, either full- or part-time. Side hustles have become the new standard. Working a side gig, whether it’s taking advantage of the gig economy or launching your own small business, can provide you with additional income that can completely improve your financial situation.
The extra money you earn as a result of launching a side hustle can help you achieve financial goals that were previously out of reach. The additional funds can be used for a variety of purposes, including savings, large-ticket purchases, new investments, and debt repayment.
Making money with Paid Survey firms such as Survey Junkie is a fantastic side hustle opportunity to consider. Starting a side business can be a difficult task. Some suggestions to help you stay motivated throughout the process are as follows:
Find a group of people to lean on for support. Reach out to friends and mentors who have attempted a similar side hustle and keep in touch with them to ensure that you are held accountable. They can also be a valuable resource when brainstorming solutions to any problems that may arise in the future.
Make a monetary goal for yourself. Determine how much money you want to make from your side hustle (as well as what you want to do with the money). This can motivate you to keep going even when you’re exhausted or discouraged.
Make a time commitment in advance. Whether you’re intending to drive for Uber or start an internet store, schedule time to dedicate to your endeavors exclusively. Keep this plan consistent as well; for example, every Monday morning before your 9-to-5 job or for two hours every evening will be beneficial.
3. Put money aside for retirement.
According to the Economic Policy Institute, half of all American households have little or no money set aside for retirement, a tendency that has deteriorated since the Great Recession began in 2007. Because many retirement savings strategies rely on the power of compound interest, it is advisable to begin saving as soon as possible. In addition, making contributions to your retirement savings may be eligible for a tax deduction.
The following tactics can help you get started now and continue throughout the remainder of the year in order to give your retirement savings some much-needed TLC:
Take advantage of any employer match that may be available. As a part of their employee benefits package, several companies match employees’ retirement contributions. When it comes to saving for retirement, making the most of your employer’s match should be your first focus. Unless this is the case, you’re simply wasting your money.
Contribute to make up for lost time. It’s possible that if you’re 50 or older and haven’t made regular payments to your IRA or 401(k), you’ll be entitled to make additional contributions to give your retirement savings a boost.
Contributions can be set to be made automatically. If you’ve struggled with prioritizing retirement savings in the past, setting up automatic contributions now can relieve you of a lot of the burden of having to exert willpower throughout the process. You should be able to do this through your bank, or even through your employment if you have a group health plan through your company.
4. Maintain a regular rebalancing of your portfolio
The Dow Jones Industrial Average dropped 26 percent in March 2020, illustrating a personal finance axiom: the stock market is unpredictable. Although some investors want to time the market, betting on the market’s constantly shifting highs and lows, others prefer to buy and hold their investments.
Even if you’re investing for the long term, you’ll want to review your portfolio on a frequent basis to ensure that it continues to meet your needs. Making certain that your investment portfolio is well-diversified might help you protect yourself against market fluctuations.
Not sure how to navigate your money through the ups and downs that come with the changing seasons of life? Here’s how to maintain consistency in your life.
A more active investment approach necessitates the hiring of an advisor because it takes a greater time commitment and confidence in one’s own depth of knowledge. If you require assistance in this area, you might consider hiring an investing advisor. If you’re just getting started, online or robo-advisors, such as Wealthsimple or Robinhood, are excellent places to begin your investing journey.
Keep up with market trends: Managing your money entails being on top of the latest market developments. Consider adding a stock ticker to your phone’s lock screen and subscribing to financial newsletters and stock alerts to keep up with the latest market news.
5. Refinance your debt
With interest rates at or near historic lows, it’s understandable that many people make debt consolidation a top New Year’s resolution. Refinancing might assist you in paying off any current debt more quickly.
If you refinance at a lower interest rate than your original loans, you’ll end up paying less in interest over the course of the loan’s term. You can apply these savings against the principal of your loan, allowing you to get out of debt more quickly. Most types of debt, from your mortgage to student loans, are eligible for refinancing.
Not only may refinancing shorten the duration of your loans, but it can also simplify your financial situation if you consolidate your debts at the same time. When you combine your debt, you utilize the proceeds from your new loan to pay down the debt you already have. After you’ve paid off your old debt, you may concentrate on making only one payment per month on your new loan.
It is not necessary to be intimidated by the prospect of refinancing. Here’s what you need to do to get started: Take your time and look around. Compare refinancing rates and terms offered by a small number of different lenders.
Take, for example, fees. Some of your past debt may carry a penalty for paying it off early. Take this into consideration when calculating the cost of refinancing – particularly when refinancing your mortgage. It is possible that the fines will outweigh the savings that could be gained via refinancing.
Pay off your previous debt. Check to see that your former debt has been totally paid off and that you have received official evidence confirming this. In the event that you’re repaying credit cards or lines of credit, make sure you close the accounts after you’ve completed the repayment so that you’re not enticed to take on additional debt.
6. Be prepared in case of an emergency
No matter how well you prepare, emergencies will always occur in one’s life at some point. In many parts of the United States, households do not have enough cash on hand to cover even a single month’s worth of lost income. If this is a source of concern for you, making emergency planning a top priority this year may be a wise resolution to set for yourself.
In the event of a worst-case situation occurring, having an adequate quantity of emergency savings and insurance coverage can safeguard you and your family. It can keep you from sliding into debt as a result of unforeseen expenses, and it can help you preserve the future you’ve worked so hard for. When it comes to being prepared for the unexpected, what should be your top priorities?
Savings for an emergency. The size of your emergency savings fund will be determined by your specific circumstances. In an ideal situation, you’ll have enough funds to cover your living expenditures for approximately three months. Conserve this money in an account with convenient access, such as a savings account with a high rate of interest.
Insurance. Health insurance, as well as house, auto, and life insurance, are all important considerations when it comes to purchasing insurance. If you believe you are underinsured in any of these areas, look for an insurer that gives a discount for obtaining numerous policies in order to lower your rates overall. Here’s a list of the best life insurance policies available today.
Make a last will and testament. A will and a personal directive are vital for persons of all ages, regardless of whether or not they have dependents or a significant amount of wealth. Making a will aids in the settlement of your estate after you die, which can involve both your assets and your liabilities. If you are unable to make decisions for yourself regarding your finances or health, a will can help you make such decisions for others.