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Your first paycheck is a memorable and fulfilling milestone in your life. It’s physical proof that you’ve started earning an income of your own, which is one of the first few steps towards financial independence. It will open you to opportunities like homeownership in the future.
Having a steady source of income also means you should start thinking of your long-term finances. The future isn’t guaranteed after all, so it pays to be prepared. Setting a few financial goals is a good investment if you want your lifestyle and finances to remain stable.
It can be hard to figure out what your financial goals should be, especially if you aren’t well-versed in money matters. Worry not-you can get started by reading about a few financial goals to invest in below.
This plan is one of the most important savings you should start building as soon as possible. Your emergency fund will be your main fallback in case of financial crises, such as unemployment or accidental injuries. It will help you avoid financial woes by minimizing your debt.
Don’t confuse emergency savings with regular savings, though. The former can only be used in urgent situations and must remain untouched otherwise. Emergency savings are also larger in amount compared to regular savings.
The amount should aim for when building up your emergency funds should be at least three to six months of your salary. Consider using automated methods if you want to prioritize saving and avoid accidentally including your savings allotment in your budget for living expenses.
As a newly employed adult, retirement can be the farthest thing from your mind. However, it’s essential to start a retirement savings account as soon as possible if you want your post-retirement life to be comfortable and free from financial stress.
When planning your retirement savings, there are a few things to keep in mind. During the early stages of your life, focus on growing your money first. Begin investing the majority of your funds into your retirement about ten to 15 years before you retire.
Instead of putting your retirement funds in an account, consider investing it in a retirement plan. Some insurance companies offer not only high returns but also additional benefits, such as accident coverage and life insurance.
Health insurance plans in countries like the Philippines are usually offered as an employee benefit. However, if your workplace doesn’t provide it, it’s crucial to invest in a health insurance plan yourself. They are one of the essential factors for getting good quality healthcare.
In case you get into an accident and need medical attention, your health insurance will shoulder most of the costs. Before you avail of health insurance, however, make sure that you know which accidents it covers so that you’re sure to receive the financial assistance you need.
If you’re the primary earner of your family, invest in a life insurance plan as soon as you can. It has a lot of benefits for both you and your family. In case you pass away unexpectedly, your life insurance will help your family stay financially stable as they recover.
Investing in life insurance can have various uses besides death benefits. It can serve as your retirement savings after a certain period. Some investment plans also offer health insurance benefits in case of accidental injuries.
Choose your insurance provider carefully, as it is a substantial financial commitment to make. When considering your insurance providers, do your due research. Compare interest rates and determine the rate of return. You want your investment to be paid back in the future, after all.
Financial planning should be done as early as possible. It might be difficult to figure out if you don’t know what to prioritize. Take a moment to sit down and consider your life goals. It will help you get started and guide you during your planning process.