29 August 2012

The most important personal finance tip...

There's one bit of advice I would give to anyone and everyone. It's a simple thing to do but will potentially avoid all sorts of problems later in life.
Again and again I see people suffering financially because they haven't followed this simple advice. That could be anything from having to work when they would prefer to retire, up to landing in serious debt when it was avoidable.
It really is simple but I'm going to say it in several different ways:
  • Give yourself a financial buffer
  • Set up an emergency fund or rainy day fund
  • Save!
This tip applies equally to high income and low income situations. Although perhaps it's more significant for high earners, because they are used to spending a lot, and if they lose a job it's a big impact.
I know I have covered this topic before - http://moneyatthespeedoflife.blogspot.co.uk/2012/01/plan-for-more-income.html - but it's amazing how much a cushion of savings can help when something changes in life, or something goes wrong. Give yourself a break.

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