Life can be seen as a variety of different chapters. All being defined by our biggest challenges our most difficult decisions and our greatest victories. Knowing how to go about the different chapters in our lives is not always easy and it can be very difficult to know what the best decisions are in order to enjoy the best level of success, enjoyment and happiness in life.
This is never more true than when it comes to the financial situations in our lives and the financial decisions that we need to make. Life is a long game and the decisions we make at different stages in our lives can have a huge impact later on. So today we are looking a the seven most important financial decisions that are crucial to get right in order to reduce the risk of regret later on in life.
Your Chosen Company
The company that you work for now, not only has an impact on your life in the present moment, but it is important to consider the impact it can have later on in your life. Companies that offer retirement contributions, for example, are of huge benefit to any employee regardless of their age. It is common for young people, under the age of 35 to view pension contributions as something they can ‘worry about later on’. However not choosing companies that offer retirement contributions can have a very negative effect later on in life, when retirement becomes a much more real and looming situation.
The company that you work for can also have a significant impact on your financial future in terms of the development and opportunities that that company has to offer you. If the company that you work for is heavily focused on staff retention, development and support then you can be confident that your career within that company should be a healthy one. Similarly looking into the strength of your company, within its market, will also give you a good indication into the power of your company and how heavily invested you should be in it, in terms of looking forwards to the future.
The investments that you make throughout your working life will obviously have a big impact on your financial situation in the future. Understanding the different ways to invest your money is not always easy, particularly for those that don’t have a keen eye for figures and finance. However just spending a small amount of time, each week, to research interesting ways to invest small parts of your income and savings can pay dividends later on down the road. Finding the right investments can be a complicated game, so make sure you make calculated decisions and use the help of specialists where possible.
Renting and Buying
Getting that proverbial foot onto the property ladder is certainly no mean feat these day, particularly as a single person. There are still some situations where renting is the more desirable option. If you are in a place, where you don’t see yourself settling long-term and don’t fancy having to deal with tenants in the future, then renting is definitely the easier option. However thinking about investing in a property is one of the best ways to reap security later on in life and into retirement.
It is not always easy however to know exactly what time of investment will work best for you and the type of property and lifestyle you are looking for. Put in some research to see the types of property and investment schemes in your area and hone in on the ones that seem most appealing to you. Look for schemes such as a HDB BTO launch that offer affordable investments in developing communities and look into current and future developments in areas that are set to enjoy investment from the local community and offer good access to schools, public transportation and any facility that is important to you and your family.
Learn To Negotiate
Recent studies have revealed that individuals that negotiated on their starting salaries enjoy greater earning potential in their careers. This new study carried out at George Mason University and Temple University found that individuals who negotiated their starting salaries average a $5,000 increase in comparison to those that didn’t. This study concluded that an employee with an extra $5,000 a year (with an increase of 5% year on year) would eventually end up earning around $600,000 more within a 40 year career, than those that never negotiated in the first place. Therefore this new study reveals that even the very first salary that we accept in our first jobs can have a big impact on our overall financial success.
You probably didn’t expect to see this on the list, however this is one of the most important financial decisions we can make in life: who we marry. Now, we are not suggesting that you marry for money, quite the opposite in fact. As it is a well known fact that divorce is one of the most expensive issues we can face in life, we always advise to chose very wisely before making the commitment.
Marrying for love and staying committed to each other and staying together is one of the best financial moves we can make in life. The devastation of divorce, not just financially but of course also emotionally, can have a huge effect on our lives. So if you can find a partner that you are committed to and financially compatible with, with whom you can set up a financial plan of saving, investing and building a future with, then you are most certainly onto a winner.
As statistics are showing that women are having babies later on in life, this is having an impact on the financial income that women are enjoying both individually and as part of a shared household. As women are now delaying having children and focusing on careers until later on in life, women are reaping a completely new level of financial success which also has a very positive impact later on in life. It is also interesting to think about the couples that are having children earlier on in life and how that decision impacts their financial life later on down the road. Having children in your mid-20’s means that by the time you hit 50, your children are already well past the expensive University stage of life. This throws out around another 15 years of work life where you can focus on the retirement savings. Those parents waiting to fulfill their career goals and achieve more financial success, earlier on, are more likely to have dependent children much closer to the age of retirement.
“Take Care of the Dollars and the Cents Will Take Care of Themselves”
We were all told this as young children, in order to appreciate the value of money. However it is very easy to forget once you reach a certain level of financial security. When we tot up that morning coffee, the impulse buys at our favourite fashion store and all the small items that we dole up for without even registering them, well it can be pretty surprising. Tracking your expenses on everything from your regular outgoings through to the larger impulse purchases, identifying your spending ‘weak spots’ can really help you to spend less and save much, much more.
So the next time you reach for that 50% reduced item that you don’t even need, or you go to buy that morning coffee, that you don’t even particularly fancy, then reminding yourselves of that age old expression, can go a long way in you being much more savvy with your finances and making much more intelligent financial decisions.