The Happiness of Financial Sense
Upon beginning my career in insurance years ago, I was told that the average person earns over $800,000 in their lifetime. At first, this seemingly high number incited in me a feeling of "I'm rich!" astonishment. Yet I quickly learned a fact of life that continues to challenge people everywhere; it is always much easier to spend money than to earn it.
After my first (and last) bounced cheque at age twenty-four, I realized the importance of wealth management and resolved to learn more about the topic. I've discovered that life involves much less stress and anxiety when your finances are in order — good wealth management can indeed bring happiness.
But how can this financial happiness be attained? It takes both effort and commitment, but by following this basic advice your future will be both more secure and more enjoyable.
- Be prepared for life's unpredictability — disasters, accidents, illnesses, unemployment, and countless other unfortunate events can change your financial situation at any time. Make sure you have adequate life insurance, disability insurance, employment insurance, and an emergency fund so that you and your family are prepared for these circumstances. Get a high deductible on your home and auto insurance, as this will help you to stay in your insurer's good graces and to reduce your annual premium by 10%.
- Don't spend more than you earn or become burdened by debt. Before you purchase any item, ask yourself if that item is really necessary in your life and if not, don't buy it. This concept is particularly important in the purchase of houses; rather than becoming weighed down by the debt of an overly expensive house, buy a home you can afford and put down 20% minimum of the purchase price to prepare for unexpected expenses. In order to avoid debt problems, pay with cash or debit as often as possible and pay off high-interest debts such as credit cards in full when the bill arrives. Know your credit history and put yourself on a budget to improve it if necessary. Rather than spending money, try using free local services like the library or community centre for their gym or pool.
- SAVE YOUR MONEY! Lastly, advice I received years ago makes even more sense to me now; pay yourself first. It is necessary to have a surplus on your monthly budget in order to become a saver and an investor. Take 10% of your monthly pay and deposit it into a separate savings account. You'll soon be amazed at the amount you've saved and may even be able to say, "I'm rich!" and more importantly, "I'm happy!"
Allison Fellowes Strike