One of the biggest mistakes younger people make is not saving enough money for the future. It is important to start young in order to build up a sizable amount that you can use post-retirement or for emergencies.
A lot of young doctors make the mistake of living beyond their means because they are fresh out of medical school and earning substantial checks. However, it is better to set limits for yourself and be cautious of what you spend money on.
Build a Backup Plan
Life is unexpected and as a result, you should start setting aside money for emergencies. A great way to find out what amount you should save is to consider how much you spend a month. In this amount, you should include your rent or house payments, recurring bills (phone, cable, car payments, etc.), utilities, and an estimated amount for spending money. Once you figure out the amount, let’s say $1,000, you will want to increase that amount to accommodate up to three months of living expenses. By doing this, you can prevent having to use credit cards or taking out loans to cover possible job loss, medical emergencies, etc.
Pay Debt First
It should always be your priority to pay off your debt because if you let payments fall, you can risk owing even more money. Once you pay off at least the minimum amount for your debt, you should take the money that is left over and put it towards your safety net account.
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