Getting a handle on some of the financial shocks that could shake up your world may help you feel more secure overall, and allow you to once again enjoy a night of uninterrupted shut-eye. Here are a few good-to-know tips.
1. Make yourself essential at work
Today, many people are concerned they may lose their jobs, and thus their source of income, because of their positions becoming redundant, or even being replaced by robot workers.
There are some things in life you simply can’t control; company layoffs can happen for any number of reasons, many of which have nothing to do with employee performance. And, as they have in the past, technological advances could certainly change the employment landscape of the future.
But some actions are under your direct control, and one includes making yourself as essential an employee as possible. This means showing initiative by going above and beyond expectations at the office place, continually increasing your skillset, and ensuring you have a positive impact on co-workers and managers alike.
Perhaps you have a skill your employer isn’t aware of? Maybe you have an area of expertise outside of the workplace that could actually help your company? If so, offer it up – thinking outside the box when it comes to your job could help in ways you haven’t yet considered.
Being a stand-out employee is the best way to manage what you can, and it can help assure you find another job if the time ever comes to move on from your current one.
2. Live within – or below – your means
Attempting to keep up with a lifestyle you can’t afford is certainly cause for sleepless nights. You may, understandably, like the finer things in life. But if you are going into serious debt to acquire them, they will ultimately end up causing far more pain than enjoyment.
One of the best ways to save money and be prepared for emergencies is to live within — or, ideally, below — your means. This philosophy doesn’t just cover your day-to-day expenses, but also the biggest purchases you’ll ever make, including homes and automobiles.
Use Prudential’s Home Budget and Emergency Savings calculators to help you figure out if your spending is exceeding your income at a dangerous rate.
While individual circumstances will differ, one rule of thumb is that your monthly debt expenses, including housing costs, should not exceed 36% of your gross monthly income.
Another formula for budgeting utilizes the 50/30/20 rule. This method says that no more than 50% of your take-home pay should go to essentials such as housing, utilities and food, no more than 30% should go toward lifestyle expenses such as cable, outside entertainment and travel, and at least 20% should go toward funding savings goals, such as retirement and an emergency account to cover unexpected life events.
3. Ensure you’re covered
While most savings plans revolve around retirement goals and the funding of children’s futures, too little thought may be given to medical costs in retirement — even though, the older you are, the higher your health care costs are likely to be. Make sure you’re considering this overlooked expense and controlling your retirement health care costs by:
- Evaluating your options for paying for care
- Becoming an informed consumer of medical services and benefits
- Exploring long-term care insurance
You also might ease some of your financial anxieties if you can be sure your family will be taken care of if something unexpected happens to you. Having a life insurance policy can help.
4. Family affairs
Family changes, especially those involving caring for sick parents, are often forced front and center when unforeseen medical issues arise. Much has been written about the sandwich generation, people who are taking care of both aging parents and young or adult children.
This double-caretaker role may mean you are forced to reduce your hours or even take a leave of absence from work, which can put additional financial stress on the family.
What you can do next
Getting the z's you need means taking care of the $'s you can control—and prepping for whatever comes your way.