Tuesday, November 13, 2012

5 Moves that bring us Financial Peace of Mind

Money can bring with it plenty of worries. But not having the proper financial safeguards in place can bring worries of its own. While we can’t prepare for every financial situation that may befall us, there are certainly ways that we can at least improve our financial peace of mind. And while achieving such peace of mind might not happen overnight, by working through certain steps or knowing what sorts of tools are at our disposal to better protect our financial lives and assets, we can help safeguard ourselves against a variety of potential issues.

Becoming Mortgage Free
I’m not a fan of debt. While I know that sometimes it’s tough to avoid, this doesn’t mean that we can’t try. A mortgage is the one aspect of our debt-related finances that is especially difficult to avoid due to the cost of many homes. However, I never liked the fact that such a payment was there whether we were able to afford it or not; therefore, we downsized our home and bought a space that we could afford outright. This allowed us to avoid mortgage payments and gave us a little breathing room and extra peace of mind in our financial lives.

Debt Avoidance
Debt is one of those things that can not only weigh on our minds but can eat into the strength of our financial resources. Unlike a mortgage, items like credit card debt may have little positive outcome other than enabling users to delay the eventual payment for purchases. The problem is that this delay can come with excessive interest payments and worry over the making of those payments. We’ve been debt free since we paid off my wife’s student loans several years ago. It’s a wonderful feeling and provides peace of mind as well as other options to consider for how to make use of our money in more productive and positive ways.

Emergency Fund
We just never know what kind of curve balls life is going to throw us, and having an emergency fund in place can help us deal with those curve balls. Our family tends to at least try to keep an emergency fund of $5,000 available, which has helped us deal with everything from a broken flood control pump and preparing our home for sale, to purchasing our new home and helping to cover the birthing costs of both our children. Having that backup fund has come in handy in a number of instances and it provides us with a little extra peace of mind even when we don’t need it.

Insurance Coverage
The thing about insurance is that it’s one of those costs we hate to pay and may rarely use, but it sure is nice to have when we really need it. From automobile coverage to health, dental, vision, and even identity theft insurance, our insurance makes a huge difference in the amount that we might have to pay for such items otherwise. For example, our last family dental bill would have been almost $1,000, but with our insurance coverage, we paid $0. A car accident that would have cost us over $5,000 in repairs ended up costing us just the $500 insurance deductible.

Emergency Supplies
From extra food and water to a propane fueled cook stove, batteries, flashlights, and similar items, we’ve found that spending a little extra cash to provide us some emergency supplies helps make us feel better about the future. It didn’t take much -- only about $300 in fact -- to get a multi-month supply of food, water, and additional supplies added to items we already had on hand and that set us up comfortably should an emergency of some sort befall our area. It wasn’t a big investment to make to ensure a more comfortable sleep at night through additional peace of mind.

2 comments:

  1. Fantastic list, could have written them myself meaning I have lived by them and they are very good.

    ReplyDelete