Life is full of decisions. 773,618 decisions over the lifetime of an average person, if you’re keen on numbers. And 143,262 of them end up in the regret file.
To help you make sound decisions that you won’t regret and will truly secure your future, here’s a list of the most important financial decisions you need to make in your life. Think them through and decide wisely!
What is the right career for you?
A very important first step into adulthood is deciding what you want to do for the rest of your life. In other words, picking a career.
Traditional jobs, high-paying but stressful ones, risky entrepreneurships, the choice belongs to you. But chose wisely, because deciding on the career you want to pursue can provide the first indications of how much money you’ll earn throughout your life.
#Tip: Pick a career with a return on investment that satisfies you on the long term.
Will you require financial support?
Unless you’re a genius and get a full scholarship or come from a wealthy family and have your parents pay for everything, you’ll need to consider how to cover all your expenses.
A part-time job or a student loan may solve part of your problem. But the cost of attending a top university can leave you bankrupt, and surely that’s not how you want to start your working career.
#Tip: Research repayments and try to borrow a minimum amount to avoid high indebtedness.
Should you use credit cards?
Having a credit card is considered a good thing if you want to improve your credit score. You can prove you’re a responsible adult and a good payer to the credit bureaus and use your payment activity to back this up.
From monthly bills to almost everything you could think of, using credit cards (responsibly!) can help you track your expenses and lower your cash transaction to a minimum.
#Tip: Don’t use credit cards to cover for other credit cards. It’s a sure way of ending up in debt!
Should you take short-term loans?
When in need of quick money, many people apply for a short-term loan. But if you think it is easier to pay and be done with, think again.
Short-term loans usually charge higher rates on repayments than long-term loans and can seriously affect your financial standing. Not to mention that delayed payments or non-repayment of such loans can cause your downfall, credit wise.
#Tip: Think things through before taking a short-term loan and don’t spend it on things you can buy by saving some cash.
Will you buy a house?
This is one of the biggest, most important purchases in your life. And unless you’re Bill Gates rich, it requires careful consideration.
From location and size to down-payment and mortgage terms, and even future neighbors, there are a lot of factors that have to be taken into account. Firstly, make sure what you earn can cover for all the future costs of the house. You don’t want to fail in repaying a mortgage and lose everything you’ve paid so far, including the actual house.
#Tip: Settle into a job first and try short-term renting until you find a house that ticks all your boxes.
Do you want a homeowner’s insurance?
A must-have whenever you purchase a property, is a homeowner’s insurance. That’s because it is the best way to protect your investment, aka your home, while assuring your peace of mind.
A good insurance is the one that covers the house itself as well as the assets inside in the event of a disaster. An even better one covers house contents against theft or accidents of third parties inside the house.
#Tip: Look for a comprehensive homeowner’s insurance that also covers floods and earthquakes and other requirements you might have.
What about a life insurance?
Most people don’t like to think about death and disregard this aspect but if you’re planning for the future, having a life insurance should be part of your financial strategy.
First of all, a life insurance is your way of making sure your loved ones won’t get stuck with your debts such as mortgages. Secondly, life insurances can also provide you certain tax benefits throughout your life such as income tax-free loans from the value of the term policy.
#Tip: Cheap insurance policies may have tricky loopholes so don’t settle for anything less than a reputable insurer.
Do you plan on saving for retirement?
‘A dollar saved now is two dollars spent later’. Later, as in your retirement years.
Retirement is an important decision and most of us are not ready to make it before reaching a certain financial comfort. We try to prolong our working time and enjoy its benefits to make enough money and make a smooth transition to retirement.
But do you know what else works? Saving early and often. One way would be through compound interest which can help you get a higher return on your savings and investments. Let your money work for you.
#Tip: Think long term, deposit a starting amount into an account and add constantly to help your money grow.