After many years of formal schooling and being out of school, like all young working adults, I was eager to excel in the career that I had embarked on.
All of us would remember the time when we received our first pay cheque from our first full-time job. It was a sweet reward which we achieved all through our own effort. It was a significant moment and many of us would have celebrated this occasion by giving treats to our loved ones and friends.
Not fully realising, I have made the first step up to the next life-stage. And it is a time that I am going have the power to manage the most money I have come into touch with than ever before.
With great power, comes great responsibility.
With my parents laboring in the work force for decades, I begin to see the lines on their worn-out skin. I start noticing that there is now more hair left behind in the bathroom. The volume of their voices have also softened and they speak with a little less gusto than before
My parents are aging.
It is a time when we now want to reduce the burden on our parents and we initiate to take over our own personal expenses and contribute towards our monthly expenses.
And almost unknowingly, our material needs have increased. With more money in hand, we begin to eat a little better, wear a little better and buy a little more. The phase of a young working adult is also when many of us begin to make plans for our future with a life partner. Still at a young age, we need to make our biggest financial commitments and decisions on our housing and marriage needs.
Our financial responsibility skyrockets.
With these responsibilities, there is little room for error. I need to look out for any events which could occur that would prevent me from fulfilling my financial responsibility.
Getting fired: If I were to get fired, would I be able to replace this income? While this is going to be a stressful period, it is likely that I would be able to find an alternative job if I am not too choosy as I am still relatively young. This is less of a financial risk.
Falling critically ill and unfortunate demise: With little savings, would I be able to pay for my medical expenses and how can I replace my lost income? How can my parents and my loved ones not be financially impacted if I am no longer around to provide for them?
As a young working adult, we have little savings to start off with and we would not be able to provide for ourselves or our loved ones financially in the event we fall critically ill or pass away. Rather than taking on this financial risk ourselves, it is important for us to transfer this financial risk to a third party and this is where insurance comes to play.
More often than not, most of us had an early and forced introduction to insurance. We were either approached by a relative, a friend or stopped by a stranger at a public place to complete a survey. For most of us, it is likely that we made our first insurance policy purchase through one of these channels.
While it is with positive intentions when they were introduced to us, we probably had little knowledge that the cost for similar types of insurance products across insurance companies can be very different. It is also essential that we understand the amount of insurance coverage we require for the right areas.
We do not want to be paying and still not be insured with enough insurance coverage, especially in areas of high priorities. For example, whole life insurance and accident insurance are not top priorities for young working adults.
Protecting our loved ones and ourselves
As we strive towards our goals, it is important that we are aware of our financial responsibilities. It is essential that we understand how we could transfer these financial risks away to protect our loved ones and ourselves from the heavy financial impact of any unexpected event.