Financial Shock ruin can happen to anyone, and that’s what makes it imperative that you take precautions to prevent yourself from experiencing financial hardship. Debt, trouble in the workplace, and a struggling economy are disasters that strike indiscriminately, but you don’t have to be helpless if one or all of these affect you.
No matter what your financial situation is, you need to prepare for all of life’s little worst-case scenarios. Continue reading to get seven sound tips that will help you to weather just about any financial storm.
1. Create a Realistic Budget and Stick to it
If you don’t have a plan for your money, then you are more likely to fall prey to your spending whims. You need to put a budget in place to serve as a guideline for your spending.
When you make a budget, you need to set realistic goals. You should take whatever you’re going to put into savings out of the equation—think of your savings as being like the taxes you take out of your money before making your budget.
Account for all of your monthly bills first, and then figure out how much you’ll need for other essentials such as food, clothing, and household needs. When you’ve covered all of your essential needs, then the rest is for discretionary spending, meaning you can spend it how you want to.
Even though you can use your discretionary cash for whatever you want, you still need to be mindful of how you spend. If you’re a fashionista, then shop for womens clothing online where you can get significant discounts instead of going to expensive boutiques. You can also invest some of that “do whatever” money!
2. Minimize Monthly Bills
One of the best ways to protect yourself from financial shock is to closely manage your bills. Your monthly expenses likely make up the vast majority of your spending. If you can bring those costs down, then you could save your self thousands of dollars every year.
3. Excel at the Workplace
Layoffs and furloughs can happen unexpectedly, but there are still things you can do to keep them from happening to you. You need your job, so you should work diligently with the goal of making your company realize they need you just as much.
Working hard and showing yourself to be a superstar in your role isn’t just the best way to climb the ladder in the company, it also makes you an asset. Should they fall on hard times and need to cut people to stay afloat, then your track record of excellence in the workplace will help you to keep your position.
Excelling also makes it harder for your boss to fire you, even if he or she can’t stand you. If your company terminates you due to prejudice, then seek the counsel of an employment law attorney. A lawyer may not be able to get you your job back, but they’ll be able to get you compensation for your job.
4. Build an Emergency Fund
Life hits unexpectedly, and it’s usually expensive when it does. One of the most crucial elements to maintaining your financial health is to build an emergency fund.
You should also consider getting income protection insurance to accompany your emergency budget. This insurance pays up to 75% of your normal income in the case that you suffer an injury that puts you out of commission.
5. Keep up with Maintenance
A great way to minimize your spending and save more money is to keep up with the maintenance of essentials like your car and household appliances. Being diligent about their upkeep will extend their life and also cut down on your repair costs.
6. Get yourself a Side Hustle
These days, people are coming up with a lot of creative ways to make extra money on the side, and you can too. Get yourself a side hustle. You could drive for Uber or Lyft, deliver packages for Amazon, or even start your own eCommerce business. The possibilities are endless.
7. Downsize your Home
Have your kids flown the coop and left you with more home than you know what to do with? Then you should consider downsizing. With the money you save by moving into a smaller house or even an apartment or condo, you could take more vacations and enjoy the perks of having a kidless home as well as build your nest egg.