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This includes taking out insurance for life’s risks and saving regularly to ensure you have enough income when you stop working.
Insurance policies can protect you and your loved ones in almost any eventuality. They may be compulsory, like car or building insurance, or voluntary.
While you can’t insure against every possible risk, how should you decide what to cover? A good place to start is to insure the things you’d find it hard, if not impossible, to cover or replace yourself. For example, most people would find it difficult to replace the main household income if they couldn't work due to illness or injury.
Think about what you need and value most, such as your family, health, home, pets, and possessions. Research what it would cost to protect these with insurance. Taking out cover for these will mean you have to pay premiums, so factor that into your monthly budget.
Here’s a healthy approach to protecting you and your family against any risk:
Take out insurance to cover substantial risks you’d find it hard to recover from, such as fire or permanent injury
Carefully study any terms and conditions associated with an insurance policy. For instance, what excess payment will you need to make if you make a claim? What exclusions or medical conditions need to be declared?
It can be confusing to compare insurance policies from different providers. Look at all the elements that make up a policy, including:
Find out more about insurance.
One day you’ll no longer be able to work and will rely on your retirement income. So it’s important to get into the habit of putting money aside for your latter years. Cultivating healthy financial habits now will help you enjoy a much more comfortable retirement.
Estimating how much money you’ll need to live on in retirement can be difficult. Start by assuming you’ll need between half and two-thirds of your salary to maintain your lifestyle.
You can estimate your retirement needs very roughly using a few simple steps:
Even if you’re contributing to a work pension scheme, it’s unlikely to cover what you need to retire comfortably.
Work out how much you need to save to retire.
The earlier you start saving, the larger your retirement goal will be. That’s because the longer you save, the more compound interest you earn. This means you get interest not only on your savings but also on the accumulated interest you’ve already earned.
Explore: Retirement and financial planning
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