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How Families and Singles Build Financial Security

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(CNBNewsnet)(August 15, 2022)--It's tough to build a financially secure future during an economically turbulent period like the early 2020s. Families and single working people sometimes find it challenging to stay ahead of incoming monthly bills. It's not unusual for inflation and business slowdowns to put many people a paycheck away from financial catastrophe. What's the solution?

No matter your current situation, there are effective ways to develop a long-term plan for personal financial security. Besides investing in real estate, people are discovering the advantage of bundling insurance coverage for significant savings. Other savvy tactics include purchasing extended car warranties to minimize repair costs and employing the five-percent rule to grow savings accounts. The following suggestions can help you become debt-free and start the rewarding journey that can lead to monetary stability and comfortable retirement.

Invest in Real Estate

If you want solid, steady income from dividends, long-term asset appreciation, and the chance to fully diversify a portfolio, consider investing in REITs (real estate investment trusts). The entire sector enjoys minimal volatility, and REITs can help families and single adults create financial stability in several ways. Remember to check out the companies behind the REITs you intend to invest in by looking at financial statements, management teams, the kinds of properties the trust owns, where the real estate is located, the firm's dividend payout history, and average dividend yield. There's plenty to consider, but you can save time by reviewing an informative guide that lists the best REITs of the year based on their financial histories.

Bundle Insurance Coverage

One of the simplest ways to remove a significant chunk of total insurance premium expenses is to bundle some or all of your policies with one company. Carriers offer substantial discounts for clients who purchase a home, autos, life, and other policies from a single issuer. Bundling has been around for many years but is becoming more popular today as so many consumers own at least a half-dozen different forms of insurance policies.

Buy Extended Car Warranties

In the past decade, there's been a rapid increase in companies selling stand-alone vehicle warranties. Not all of the products are reliable or worth their price. Still, several excellent providers sell coverage that can represent an above-average value for the everyday driver and car owner. Check prices and research company backgrounds before choosing a carrier. Avoid high-priced plans and instead stick with those that come with modest annual premiums and a one, two, or three-year term.

Use the Five Percent Rule

You might hear different percentage amounts for this rule, but the most common version is five percent, which refers to the amount of every paycheck you should be putting into an emergency fund or savings account. Once the e-fund holds about three months of income, add the regular five percent payroll deduction directly to a bank or S&L savings account. If that amount is a burden for you, start with two percent and slowly increase until you can afford five percent. Building a savings habit is one of the most critical steps in a lifetime financial stability program.