Life Planning For Beginners: The Fundamentals
One of life’s jokes is that it will throw you a curveball amid the best-laid plans. While a lot of the beauty of life is found in the unexpected, the best strategy is to plan for contingencies and keep the long game in mind. Pursue your heart’s desires and take some risks, but do so knowing you have a backup plan.
You can’t plan for all of life’s caveats, but there are some things you can do to ensure that you and your loved ones are provided for. Scott Loveland Insurance thrives on helping families improve their lives, which is why we’ve provided this practical advice for life planning:
Money in the Form of Property
Real estate is always a solid investment choice. Like the stock market, the real estate market fluctuates, so it’s smart to plan for the long term. Plan to purchase real estate initially as a rental investment. From the start, you can add a steady, mostly passive, income. Rentals are always needed, and in some markets, rentals can be especially lucrative due to supply and demand.
There are some costs, such as saving up for the initial down payment or the full purchase price, upkeep, and managing renters. However, the benefits will far surpass the hassle. If you ever need to liquidate your investment into cash or the market reaches its top, far exceeding what you purchased the property for, then you can easily sell and reap the benefits of your initial investment.
Plan for the Unexpected
We never know when our last day will be and that will forever remain the great mystery of life. While the future is unknown, you can still plan for the day you are no longer here and ensure that your loved ones are taken care of. Term life insurance will cover the years your family relies on you for your income. If you pass away during that term, your beneficiaries (AKA the people you name to get the money) will receive the proceeds from the policy.
Term life insurance is especially important if you have young children, a spouse that relies on your income, high debt-to-income ratios, joint mortgages or debts, and/or several years left in the workforce. To find the right policy to fit your needs, turn to Scott Loveland Insurance.
Living Below Your Means
Life is made for living. Occasionally you should take a vacation or splurge on something you’ve been wanting for a while. But for the most part, the goal should be to live below your means. In quite simple math (and a completely unrealistic budget), if you make $1,000, you should aim to have $800 or below in expenses. The extra money brought in every month can go toward savings or investing.
Besides being one of the easiest ways to build your wealth, there’s also freedom in knowing that you’re not drowning in debt or expenses. If you lose an income source, you won’t be struggling to find a way to make ends meet. Set up a budget, and if you discover you’re living paycheck to paycheck, determine what you can cut back on to save some money.
Diversify Your Income
You have no control of external circumstances. Unfortunately, that also means there’s no certainty that the income you rely on will forever be continuous and steady. By diversifying your investment and income sources, if one stream dries up, you won’t operate in panic mode to find an alternative. Besides your full-time job and investing in real estate, here are some things you can do:
Turn a hobby into income.
Invest according to your goals.
Take up freelancing work or a part-time job.
Invest in yourself — continuing your education can increase your earning potential and open more doors for you.
There’s no point in stressing about the future and what may come because you never know what the hours and days ahead will bring. However, setting yourself up for your best opportunities and preparing for worst-case scenarios will help you sleep better at night. Not every suggestion here or elsewhere can be taken at one time, but you can make small changes here and there to make your financial future brighter.