There are many things we will have to spend money on in our lives. These range from small things to very big, important, things. Here are three of the most important things you will buy during your life:
The biggest financial commitment you will make in your life is when you buy a house. Buying your own place to live doesn’t come cheap, houses cost a lot of money. The majority of people won’t be able to pay for a house using their own money, so will look for other finance options. Some people choose to rent a house; this means they pay a monthly rent in exchange for living in a house. It can be easier to afford, but it means you don’t really own the house. Other people opt for a mortgage, which is basically a massive loan. You can get a mortgage from your bank, and that will cover a huge part of the house cost. You’re then free to move into the house and will spend a good few years paying off your mortgage. Only once the mortgage is paid off, will the house be 100% yours.
If buying a house sounds quite complicated, that’s because it is! There’s lots you have to consider, and that’s before you’ve even bought it. Once you’ve bought your house, you then have to consider all the additional costs that come with it. A big financial commitment, but one most people will go through.
At some point in your life, you’ll probably end up buying insurance. There are quite a few types of insurance out there, from car insurance to income protection insurance. The purpose of buying insurance is that it can help you, financially, if things ever go wrong. For example, if you have car insurance, and your car breaks down, the insurer will cover the repair costs. Similarly, if you have income protection insurance, and are unable to work due to illness, the insurer will pay some of your income. It’s the same principle for all other types of insurance too.
Insurance is basically a fail safe, should bad things happen. Most people will buy some types of insurance throughout their life. I can guarantee people with cars and houses will have them both insured. The bottom line is, buying insurance is a very sensible financial decision if you’re looking at the long term.
Purchasing a car is yet another big financial decision for people to make. Like a house and insurance, you’re going to purchase a car at least once in your life. Generally speaking, cars start off cheap, then you buy a more expensive one each time. This is largely down to the fact that when you first learn to drive, you’ll have less money. But, as the years go by, you become more financially stable and can afford better cars.
Again, like with a house, you have to think about the other financial costs of a car too. It’s not just the price, but there’s tax, car servicing, fuel, and so on.