You can be as creative as you want in finding ways to save money. Boycotting shopping, dining out, and cable TV are some quick options. But there are certain things that you must never slash off your budget no matter how tight the money becomes. The items below are worth every dollar that you spend on it.
- Your Emergency Fund
More than anything, the pandemic has highlighted the importance of an established emergency fund. In case of the unexpected, your emergency fund will tide you over instead of busting out your credit cards. You will be able to afford your bills without going into debt. Every month, make sure you contribute to your emergency fund.
- Your 401k Employer Match
This is a golden opportunity. Not all employers match your 401(k) contributions. If yours does, do not miss it! It is essentialy getting free money for your retirement. If you get a 50 cent match for every dollar, up to the first 6%, you effectively earn 50% guaranteed interest rate on 6 % of your salary!
- Repaying Your Debt
If you have high interest credit card debt, you must focus on paying it back as soon as possible. You just cannot afford not to. Every month the debt stays, you are sinking deeper into your debt hole. Low interest debt are not as urgent, but if your goal is to live a debt-free life, make a permanent room for debt repayments in your budget until you are done.
- Your Health Insurance
If you have a serious illness or injury, expect your hospital bills to reach the six-figure mark or even stretch into millions. This makes health insurance a necessity. Get an individual plan if your employer does not offer one. No matter how much money you have to pay monthly, it is still cheaper than the cost of not having health insurance. A few hundred dollars every month is nothing compared to having to spend thousands, even millions, in case of a serious health problem. Your insurance also protects you from amassing debt, even going bankrupt.