Finances are a common source of stress for many couples, individuals, and families. Many of us live paycheck to paycheck, hoping nothing unexpected pops up. Unfortunately, we are all likely to experience setbacks from time to time. Plus, we’ve got retirement savings to consider. With that in mind, how can we avoid financial stress in the future?
Use a Budget
The first step in taking control of your finances is to take note of all your debts and bills, then create a monthly budget. Track all of your spending and use your money intentionally by deciding in advance exactly what it will be used for.
Once you know where your money is going, find out if any payments can be reduced. Compare providers for cable, internet, cell phone, car insurance, and more until you find the lowest rate and make the switch. Are there other ways you can cut spending? Can you eat at home more? Walk or take the bus? Workout at home instead of a gym?
Pay Off Debt & Build Savings
It is a good rule of thumb to set aside 10% of each paycheck in a savings account for emergencies. If this is unrealistic for you, decide how much is reasonable. Can you set aside $50 each month? Try to get $1,000 set aside, then one month of income, then two, and so on. If you can save enough to pay the bills for a few months, you won’t have to worry about an unforeseen job loss or pandemic.
Next, calculate how much extra you can put toward your debts each month. Once the smallest debt is paid off, roll the amount you were paying into the monthly amount for the next smallest debt. Continue this pattern, known as the snowball method, to pay down debts more quickly.
Plan for Retirement
You are never too young to start planning for retirement. There are several things to consider when saving for the future, including life insurance and living expenses.
How Much Do I Need to Save for Retirement?
A general rule for retirement savings is that you will most likely spend around 4% of the total saved during each year after you retire. This will vary based on the amount of debt you still have, whether you plan to travel, and other individual circumstances. Based on this percentage, you can calculate the amount you will need to save by taking your current income and multiplying it by 25. So, if you make $100,000 per year, you will need to save $2,500,000 for retirement.
When Do I Need to Get Life Insurance?
Life insurance is recommended for everyone, but most importantly, those whose financial livelihood depends on them, such as a spouse or child.
What Type of Life Insurance Do I Need?
Term life insurance provides a dividend upon your death up to a predetermined date. In other words, you may be covered for the next 10 years if you die within that time, but not afterward. Whole life insurance, or permanent life insurance, will cover you until you die, no matter how many years you live.
Whole and term life insurance companies can help you determine which is the best option for you. Typically, whole life insurance will have higher monthly premiums. Fortunately, some term life insurance companies will provide you with a plan that allows you to convert your term life insurance policy into a whole life insurance policy in the future.
What is the Average Cost of Term Life Insurance for a 30-Year-Old?
The average cost of term life insurance for a 30-year-old will depend on several individual factors, including your medical history and current health. An average ballpark is around $25 to $30 per month for a healthy, non-smoker. Whole life insurance can be hundreds of dollars a month, which is why many people opt for a convertible plan with the freedom to make smaller payments for the first few years. If you go this route, make sure you know the deadline for converting your policy so you don’t miss it.
Pacific Wealth Solutions
Contact Pacific Wealth Solutions for more information about life insurance and how to plan for your future, so you can avoid financial stress now and in retirement.
Pacific Wealth Solutions
It’s time to start prepping for your family’s future. Request a free quote from Pacific Wealth Solutions to begin the simple, no-medical-exam-required application process!
Term Life Application Steps
Step 1: Apply Now
We will take you to the Coverpath term life page.
Fill out the “Get a quote” questionnaire and click “Apply Now.”
Step 2: Create an account.
Manage your policies and investment accounts.
Get help from MassMutual directly, or you can always contact PWS via live chat or email on our website.
Set preferences and notifications. Get helpful financial resources.
Step 3: Submit the application.
Sign in to your account and finish your application.
Submit the application and wait for the approval.
Permanent Life Application Steps
Step 1: Apply Now
Navigate to the Permanent Life Insurance page.
Click “Apply Now” and fill out the questionnaire.
After the questionnaire is filled out, we will send you a customized link to continue the process. That’s it!
Start planning for your future and apply for permanent life insurance.