Financial Security | 5 Proven Ways To Be Financially Secure
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5 Proven Ways to Ensure Financial Security In Your Life

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Updated March 28, 2018

Trust Point

We are proud of Trust Point’s century of service reputation of excellence. But, our approach and purpose has always been focused on the future. Not just our own company’s future - but, more importantly, our client’s futures.

Are you dreaming of buying a new car, a European vacation, or maybe even a second home on the beach? If you have financial security these dreams are more likely to become a reality!

Your first priority to becoming financially secure is focused on ensuring you have enough to cover the expenses you may incur in the years ahead.  With that taken care of, you can concentrate on living your life – as you wish.

However, getting to that point is easier said than done – it takes diligence and proper guidance to ensure your future is financially secure. There are important steps you need to take to get your portfolio on the right path.

5 Ways To Ensure Financial Security.

1) Develop Good Money-Saving Habits

Instead of waiting until the end of the month to save money, try to save money as soon as you get paid, before you’re tempted to spend it on frivolous purchases. This approach of “out of sight, out of mind” forces you to save more and helps support your financial security.

Save up enough for at least an emergency fund. Things happen, and there are always instances that arise that may require you to dip into your savings – for example, a car breaking down, a branch falling on your roof, or a loved one with health care expenses – so be prepared. Your emergency fund should cover six months of living expenses, giving you a backup plan should you experience an emergency.

2) Contribute as Much as Possible Towards Your Retirement Plans

Your retirement plan makes saving easy. The money you contribute is automatically deducted from your paycheck. All you have to do is think about how much you want to save toward retirement on each payroll. Financial experts agree that you should set aside 10-15% of your salary. The important thing is to start somewhere. If your company offers a match, be sure to take that amount into consideration. Many U.S. employers will offer to match your retirement account contributions, sometimes up to 100%, effectively doubling your money. Again, with the “out of sight, out of mind” rule, these contributions can be automatically invested into your retirement account each paycheck, so you never have the temptation to spend it.

Whether you start by saving 5%, 10%, or 15%, the important thing is to begin as soon as possible. Consider increasing the amount annually by 1% to 2%. The best times to increase are when you receive a wage or cost of living increase or pay off a loan or mortgage—so you don’t feel the impact as much in your budget.

Challenge yourself to save a little more. No one has ever reached retirement and said, “I wish I had less!” The extra money put in today could make a big difference in helping you achieve your retirement dreams.  If you’re contributing to your retirement accounts, you’re on the right track to a healthy financial future that should last well into the final stages of life.

An IRA, or Individual Retirement Account, is another great way to put money away.  An IRA is basically a savings account with tax breaks. While there are eligibility restrictions and limits, an IRA for many individuals is an ideal retirement planning strategy.

Here’s how much you can contribute to your retirement accounts in the year 2018.

401(k)

Contribution amount 2018

Elective Deferral Limit

$18,000

Overall Contribution Limit

$54,000

Catch-Up Contribution

$6,000

 

IRAs

 Contribution amount 2018 

Roth IRA Contribution Limit

$5,500

Roth IRA Contribution Limit if 50 or over

$6,500

Traditional IRA Contribution Limit

$5,500

Traditional IRA Contribution Limit if 50 or over 

$6,500

 

Investing your money into a secure retirement account increases your family’s financial security, bringing you closer to the freedom you’ve been dreaming of.  Imagine a future in which you not only have adequate funds to live your life without worry, but you also have time to enjoy it.

If you want to gain financial security so you don’t have to struggle through retirement, push yourself to contribute as much as possible up to the maximum amount allowed into your 401(k) and IRA accounts.

3) Always Have a Smart Insurance Policy

Whether you’re an individual, married, or have children that depend on you, smart insurance policies are crucial in obtaining financial security. Whether it’s home, life, auto, health, or something else, insurance will protect your finances from being wiped out by major expenses that you simply cannot anticipate.

For example, if you or your spouse needs to go to the emergency and have adequate insurance, you’ll likely only be responsible for paying the copay out-of-pocket. If you don’t have health insurance, an emergency room visit typically costs $3,000, sometimes reaching much higher if multiple things like X-rays, surgery, or if other tests are needed.  Insurance helps protect all of the hard work you’ve done thus far to save.

For those that are parents, life insurance is another crucial piece to securing your finances – especially your family’s. If you or your spouse should pass away, there is a tremendous emotional and financial burden on the surviving members of your family. Don’t leave them unprepared in the event of a death.

4) Get your Estate Plan in Order

To ensure financial security, developing and sharing your estate planning documents is critical to ensuring your family and/or heirs can take over control and management of your money, property, and other assets.

To organize your estate plan, develop and share these specific documents:

  • Will/Testament – this legal document defines how money, property, and other assets are to be distributed in the event of death, naming one or more persons, the executor(s), to manage the estate until its final distribution.
  • Living trust – having a living trust makes it so your property can be distributed to heirs more quickly and easily, bypassing the expensive and lengthy probate process.
  • Power of attorney – power of attorney lets you name a trusted person to manage your finances should you become incapacitated or unable to make these decisions yourself.
  • Medical directive – this document outlines how the person should be treated medically and interventions when a person is incapable of making his or her own decisions.

5) Work with an Experienced Financial Planner

Without extensive experience, you may need to reach out to a financial planner to help with optimizing your portfolio. Choosing an advisor that’s just as committed to meeting your financial goals as you are is crucial in securing your future.

If you’re looking for an experienced, knowledgeable team that acts as a partner on your quest for financial security, turn to the professionals at Trust Point! For more than 100 years, we’ve been helping clients around the world by developing smart, objective-oriented financial plans.

You’re On Track to Financial Security

Now that you know these five ways to ensure your financial security, you can make progress with your life goals –whether you want to put a down payment on a home, pay for your children’s college tuition or purchase that yacht you’ve always wanted. Financial security is achievable for everyone, as long as you’re diligent.

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Trust Point

We are proud of Trust Point’s century of service reputation of excellence. But, our approach and purpose has always been focused on the future. Not just our own company’s future - but, more importantly, our client’s futures.