Guest post by Chris Haychmon of Adulting Digest
The sooner you can take control of your finances, the better off you will be. You are the master of your money, and only you can make your money work for you. The more you work to understand, direct, and manage your finances, the more independence you will have.
That said, there’s no better time to start implementing these principles than when you’re getting ready to move out for the first time. Let’s discuss some ways you can plan ahead and prepare for even the worst of situations as you set out on your own.
Get Term Life Insurance
Your income subsidizes your living situation, but if you and your income are no longer around, what happens to your assets? If you have debt, a mortgage, a spouse, and/or children, it’s wise to plan for the worst-case scenario. In this case, a 20-year term life insurance policy may be ideal. If you pass away unexpectedly, such a policy could provide financial security for your loved ones by providing for lost income and ensuring your debt is satisfied and by covering some — if not all — of the medical and funeral expenses. For more information, please reach out to the experts at Quality Term Life.
Establish an Emergency Fund
If there is one thing you should do right away, it’s to establish an emergency fund. Something is bound to come up. A hospital bill will arrive, your car will break down, or some big repair will need to be made to your home. You should be prepared. Ideally, the goal is to have three to six months of expenses saved up. If you’re just getting started, shoot for $1,000 and build from there.
To help you build an emergency fund, you may want to look into picking up a part-time job or a side gig. University students have the opportunity to take part in virtual career fairs, allowing them to connect with potential employers from the safety and comfort of their homes.
Build Your Credit Responsibly
When moving out for the first time, your goal should not be to get as many credit cards as possible. In fact, that’s the last thing you want to do. Though you will likely need a credit history to get some of the things you need (like an apartment), take advantage of your limited credit history and start building it the right way. Either ask your parents to cosign your lease, or spark your credit history before you move out.
The best way to do this is to get a secured credit card, which is relatively easy for those without credit. Then, buy one or two things with the card, pay the bill (before the due date), and put the card away until you’re confident that you’re responsible enough not to abuse it. If you’re going to college, you can also build your credit history by taking out a federal student loan; just be sure not to miss or delay any payments.
Your credit score will have a major impact on your loan terms should you decide to buy a home one day. While it is possible to purchase a home with poor credit, you’ll be required to pay much higher interest rates, so it’s in your best interest to keep your credit rating as strong as possible.
Get Identity Theft Protection
We would have to be superhuman to protect all of our assets. In today’s world, everyone can be hacked in an instant, and no bank, business or government is completely safe. That’s why it’s important to have an extra set of eyes on all your accounts. You are the first line of defense by checking your accounts regularly, and your providers are the second line of defense by protecting your data from breaches.
For a reasonable monthly fee, you can get a third set of eyes to monitor things like your social security number, credit reports, bank accounts, real estate transactions and credit activity. Identity theft protection will also insure you for any losses you may experience in the event of a breach. When it comes to securing your assets, obtaining identity theft protection may be the most important step you can take in this digital age.
Moving out for the first time is one of the most significant steps you will ever take in life. And one of the best ways to make it count is to set yourself in a position to be financially independent. Remember to start an emergency fund immediately, and consider getting a life insurance policy. Also, build your credit history the right way, and consider getting identity theft protection. Nothing can help you rest easy and achieve your goals quite like being prepared for the future.
Quality Term Life is America’s favorite life insurance agency for a reason. To learn more about how we can help you, please give us a call at 1-855-707-5433 to speak to an advisor.
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