When you’re in your twenties, you will be looking for ways to cut different costs out of your life. This is understandable because if you can find things that you’re paying for that you don’t need, you can spend more on things that you actually want. For instance, you could go on that exotic trip that you’ve been dreaming of. Or, you could purchase that new Ultra Super HD 4K TV. Yes, it’s a thousand, but it’s in the sales, and if you could cut out some of the other costs, you can justify buying it. Wouldn’t that be wonderful? Well, while it might be great to cut out costs, you do have to be careful. You don’t want to be in a situation where you stop buying things you need or stop putting money in places where it’s necessary.
So, what costs in your life should you not cut out completely?
It’s a dangerous game but one that many twenty-somethings do decide to play. The basic idea is that you should save a fraction of your paycheck each month. A little is better than nothing, but experts recommend that you save at least twenty-five percent. Right now, there are people staring at their screens in disbelief. How on earth could you survive on so little? Well, if you can’t save, that’s probably a good sign that you are living passed your means. We can change that, but you might first be thinking about just forgetting savings altogether.
After all, you’re young, there’ll be time later to save right? Don’t be so sure because, and this is going to be quite a frightening prospect, retirement is never that far away. You might think you have years and years to save, and you do, but you’d be amazed how quickly time goes.
As well as this, it’s important to understand that savings aren’t just about dealing with financial issues in the future but dealing with problems right now like debt. If at any point you are made redundant, then those savings are certainly going to come in handy. And, with so many young people freelancing their way through life, most probably will face unemployment at some point. Again, in that situation, you’re going to need to fall back on your savings. So, no, to put it bluntly, you can’t stop saving. If anything you should be saving more and if you are struggling to do that, we should again, look to the advice of financial experts. In particular, they suggest that everyone has at least two sources of income. This doesn’t mean that you will need to get a second job. It could just be a side hustle, something that you can complete in your spare time like a blog. This is certainly something that you should be considering if you’re not already doing it.
Yes, you do need to make sure you are squeezing insurance into your budget, and again, this is about making sure that you are covering your bases. It’s about knowing that if the worst does happen, you can handle it, whether that’s money being lost due to a robbery or even something like a fire. You have to understand that while quite unlikely, they aren’t outside the realms of possibility, and you’re far better off if you have insurance. You’re going to be in a much safer position if you don’t have to start again from scratch if your apartment gets robbed because that will put you under some serious financial pressure.
A lot of people look at insurance and think hey, I’m paying for something that will probably never happen. Medical insurance is a great example of this. The chances of you getting some of the conditions that will lead to serious medical bills are similar to the chances of you winning the lottery. Contrary to what is broadcast every day through the media, many of the serious medical conditions are incredibly rare, but they do happen. And if you don’t have insurance, then you could find yourself in a position where you can get the treatment, but you can’t pay for it.
Another example of this would be dental care. You might not be paying for regular dental checkups. That’s the cost, you hope you can avoid, but you can’t avoid it. You can not avoid the trips to the dentist with the aim of saving money because eventually, you’ll have a serious dental health issue whether that’s a tooth that needs filling, replacement or even surgery to fix receding gums by revolutionary and innovative dentists like Dr. Alexandre Aalam. Understandably, treatment like this is going to cost you a lot more than your typical regular trip to the dentist where you will already be paying a premium for this type of coverage.
You might have read online that buying property is a waste of your time. Let’s face it, if you can cut out the money you’re saving for a house or cut out the money you have to put towards mortgage repayments, you’d have a lot more to play around with. But again, you can’t avoid buying property forever. It’s crucial that, for financial reasons, you have a place to call home. Having property, whether it’s an apartment or a full house gives you a lot of capital to play with that, you can use for future purchases and spending that exceed regular amounts of money.
Renting property is also dead money. Say what you will about the cost of owning a home but once you do own it at least all the money you spend is going into something that is going to be yours. That’s just not true when you decide to rent a flat. This is why many experts say that people in their twenties should try and get a piece of the property market as quickly as possible.
We hope you find this advice useful and see now why you can’t just cut out the costs that you think you can avoid. They are probably far more crucial than you realize.