Your travel bucket list is essentially a promise to yourself. However, most bucket lists involve activities and experiences that don’t come free. Whether you want to travel the world, quit your job and write a book, or achieve another lifelong dream, the best way to make sure that it can happen is to become financially secure. You can make sure that your bucket list fund is secure with these tips.
Making Sure That Your Bucket List Fund Is Secure
Why Financial Security Matters
As already mentioned, financial security can ensure that your bucket list dreams can become reality. However, there’s more to making your bucket list fund secure than that. Financial security is analogous to freedom. Money is one of the most pressing worries of most adults, to the point that many people don’t even like to think about their finances, let alone talk about them.
Debt is rampant. Many people live from paycheck to paycheck, with no savings to speak of. No savings means no security blanket, which means that they’re often one unexpected expense away from going into debt or potentially even more dire consequences.
These facts aren’t just meant to scare you. Rather, it should be clear that anyone in the above situation won’t feel as though they’re in the position to splurge on their bucket list. The unfortunate truth is that we have responsibilities.
For example, as we get older, so do our parents. When your parents start to show signs of succumbing to their age, you may have to get involved financially. As well as potentially supporting your aging parents, you also want to make sure that your future is secure.
These responsibilities and bills will always take priority over a bucket list. Eventually, this can sadly result in people never being able to achieve their dreams. While you might not expect to tick off everything on your list, it’s nice to see some of your goals as attainable.
Learn Your Financial Health
The first step to making sure that you’re financially stable enough to reach some of your bucket list goals is to check on your situation. Think about it, when a doctor is seeing a patient, they have to perform a medical check. Without doing this, a doctor can’t diagnose the problem or come up with a reliable treatment plan. The same applies to your wallet.
Before you can determine how to improve your finances and ensure that you have a secure bucket list fund, you need to take a hard look at your bank account, your earnings, and your outgoings. Only then can you diagnose any financial problems. In truth, even if you have fairly healthy finances, there’s likely something more that you can do to improve your situation.
It may take a couple of months to figure out exactly what your financial situation is like. During this time, take note of everything you earn and spend. It’s surprisingly easy to spend without realizing it unless you deliberately write it down. You may even find that this extra awareness alone makes it easier to resist impulse spending.
You should also make sure that you know what outstanding debts you have. You should pay attention to how much you owe and how much you pay each month. Once you have a clear picture of your financial situation, you can do something to improve it.
Setting a Budget
The best way to improve your financial situation is to curtail your spending. If your outgoings are more than your earnings, then you have a clear problem. But even if this isn’t the case, you could still benefit from planning a budget. Once you have a good idea of how much you normally spend in a month, you can control it.
Sort out your necessary expenses from expenses that you can cut down on. This isn’t to say that you have to completely cut out any luxuries or unnecessary expenses. This tactic works for some people, but others get disheartened and lose motivation.
The most important thing is to make sure that your expenses don’t outweigh your income. Once you’ve achieved that goal, then you can use your budget to keep it that way. As well as necessities, make sure that you budget for fun money, clothing, and even an emergency fund or your savings.
By including emergency funds and savings into your budget, then you encourage yourself to save money. If you ever go under your budget, then you’re already ahead of your saving goals. Another thing to include in your budget is your debt repayments if you have any. Paying off your debts is an important step in securing your finances.
Freedom From Debt
Some debt is a necessary evil. If you own a house, then you likely have a mortgage. You may have also taken out a loan for another large expense, or to deal with a sudden and unexpected problem. Many people also have credit card debt.
However, some debt can be dealt with, and doing so can greatly improve your financial situation. If you don’t have the constant trickle of outgoings that debt brings, then you can use that money more wisely.
Rather than paying the minimum amount for every debt each month, pay as much as you can comfortably afford to get rid of them more quickly. This way, you spend less on interest rates and you can loosen up your budget sooner.
Some people prefer to pay off their debts using the “snowball method”. Here, they focus on paying off one, high-interest debt, as quickly as possible, while paying the minimum amount on other debts. Once they’re free of the first debt, then they can use that money to pay off the next debt, and so on. Other people prefer to consolidate their debts, so that they make one, large repayment each month rather than a bunch of little ones.
As well as reducing the amount of outgoings, many people increase their income. This can be necessary if your required expenses still outweigh your earnings, despite a strict budget. You can increase your income in a variety of ways.
The most obvious way to increase your income is to find a higher-paying job. However, this isn’t practical for everyone. Another option is to set up a side hustle, where you use some of your spare time to earn a little extra income.
If you can, one way to increase your income is via passive earning. This may be part of a side hustle, or you could invest your money into real estate or another asset that can earn money.
Savings and Income
The goal for all of this is to make sure that you have the financial freedom and security to spend on your bucket list. Only then can you feel comfortable to take a year off work and go backpacking.
The money that you save should be allocated in a few ways. Some can go into a long-term savings account, perhaps one with a good interest rate. Some is best in a shorter-term savings account, designed to deal with unexpected expenses and planned purchases alike.
However, many people prefer to put some of their money into investments. With a secure and diversified portfolio, you can potentially earn more money than a savings account could provide. Investments do come with a measure of risk, so do your research beforehand.
One popular recent investment asset is cryptocurrency, such as ethereum or bitcoin. If you do choose to invest in this asset, then make sure you know what you’re doing and that your money is secure. Use ethereum wallets to protect your assets before you sell.
Securing your finances isn’t easy, but it’s worth it for the freedom it can provide.