In addition to financial security in old age, enough freedom in everyday life is also important. Not depending on others for financial security, such as the state or one’s parents, is just as important for your well-being.
How do you create financial security?
Of course, there is one thing that cannot be avoided: saving. So don’t give in to every purchase impulse, don’t knock bonuses on the head straight away, make sure that there is something leftover from the salary every month. If you don’t need all credit types approved personal loans then you need to apply for one.
Common investment opportunity: Financial security through a home
Rent-free living is easy on the strained wallet in old age. The sooner savers start funding property as retirement provision care, the more flexibly you can work towards the goal. And those who plan correctly save money in many areas. If you have a real estate finance deal with a building loan agreement, you can lock in the current interest rate up to the last installment. Those who secure a low-interest rate in this way can save tens of thousands of money.
If you have your plan house construction, you can provide additional financial security in old age by dividing the room: for example, position the children’s rooms so that they can function as an independent living unit after the children have moved out. Then all you have to do is install a kitchen and you can rent out the area and thus increase your income or your pension. You only have to pay attention to tax exemptions, because any pensions and rental income that go beyond this must be taxed.
How much money do you need for financial security?
Experts recommend a savings rate of 20 percent, i.e. 20 percent of your income every month. This makes it possible not to be completely overwhelmed by costs that suddenly arise, such as a car repair or to pay off a loan in the long term. Depending on your income, however, more may be necessary. For some, such as low-wage earners or single parents, even 20 percent may not be possible. Calculate your household expenses to find out the maximum amount you can save per month.