10 Things You Need to Attain Lifelong Financial Stability

These products are the cornerstones of a solid financial foundation that can weather the unexpected.

10 Things You Need to Attain Lifelong Financial Stability Photo by Ditty_about_summer / Shutterstock.com

Being money smart is about more than having a budget and eliminating dumb purchases. It means creating a financial foundation that will carry you and your family comfortably through whatever life throws your way.

To create that foundation and find lasting financial security, you need these 10 products:

1. Checking account

Woman writing a checkNadya Lukic / Shutterstock.com

Let’s start with the basics. You need a centralized place for your money so you can manage and monitor it.

Prepaid debit cards are an option, but they can come saddled with fees. Plus, disclosures for these cards can be spotty, making it hard to know exactly how much your card is costing you.

Instead, look for a free checking account. Many institutions have scaled back their offerings, but some banks and credit unions still offer them.

2. Debit card

Woman using her debit card at an ATMbokan / Shutterstock.com

Along with your checking account, sign up for a debit card. Make sure it has a Visa or MasterCard logo and can be used like a credit card.

Having a debit card can eliminate the need to rack up credit card debt for purchases, particularly purchases for which it is impossible to use cash or a check.

3. High-yield savings account

Jason Stitt / Shutterstock.com

Every household should have an emergency fund — it’s your own personal form of insurance.

Typically, you’ll want your fund to be large enough to pay at least three to six months’ worth of expenses. Since that can be a fairly significant amount of money, you don’t want the cash languishing in a typical savings account, where it will earn next to nothing.

Savings rates aren’t great right now, but if you park money in a high-yield savings account, it could generate about 1 percent interest or more.

4. Health insurance

Surgery team in the operating roomS_L / Shutterstock.com

Health care can come with an enormous price tag, especially if you develop a serious health condition.

You may think you’re healthy or young, but even the most robust people get in car accidents and can be struck down by devastating illnesses. Unless you’re worth millions and can easily pay your own medical bills, going without health insurance is just plain dumb.

5. Homeowners or renters insurance

A firefighter extinguishes a house fireJackan / Shutterstock.com

If your home burns down, will you be left out on the street? That’s what happens to some people who fail to insure their property.

Homeowners insurance policies are relatively inexpensive for the coverage they provide, so there is little reason not to have one.

These policies typically pay to rebuild your house in the event of a total loss, such as from a fire. They also generally give you the funding to repair storm damage and vandalism.

However, don’t expect your policy to cover damage from flooding. You’ll need a separate policy for that.

If you’re renting, don’t think your landlord’s insurance policy will pay for your stuff. Instead, cover yourself with some cheap renters insurance.

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