Secure your future and protect your assets
June 16, 2008
Many of us fall into the debt trap because of poor financial planning. Spending so much for material things that sap the money out of us. I will share with you some tips you may undertake to escape falling into the debt trap:
1. Build a contingency or emergency fund of three to six months. Emergencies occur unexpected. While we still can save, stash away that money into a high-interest yielding account — a money market fund or a 30-day time deposit among others. When you need it for an emergency, you have money to take out instead of using your credit card or taking a loan.
2. Get life insurances. Get coverage for those earning money and cover their annual income for the next two years. It is up to you whether you would take term or whole-life insurance.
3. Insure your valuable assets. In this way, you can have the money to replace them. For instance, you house got burned down or your car was a total wreck, with these materials insured you will have enough money to buy a replacement. The same goes for jewelries, etc.
4. Build a retirement fund and an educational fund for your children. Invest in various tools to keep up with inflation, or better yet, to be ahead with inflation.
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