Life is full of unexpected events, there is no way around it. Adopting a passive mentality and simply just letting things happen to you is one way of dealing with it, but is it really the best idea? Instead, why not do at least the bare minimum and prepare yourself for the financial shakeups that can happen at any time?
The following ideas we’re going to present you with could single-handedly save your from a potential financial disaster, but they do require some forward thinking:
- Building an emergency fund
If you find that you don’t spend all of your money every month, why not put it aside and save it for an emergency? And if you come to the conclusion that you’re spending it on things you don’t really need, this is the perfect opportunity to break the habit and create a better and more rational spending strategy. How big should the emergency fund be? The bigger, the better. But ideally, it should be enough to allow for at least six months of comfortable living. Your emergency fund will also come in handy if you need to deal with a sudden medical emergency or something similar.
- Get insured
This is especially recommended in case your job requires you to put your health in danger on a daily basis. Are you working with dangerous tools or machinery? Don’t simply remain idle and keep waiting for the day when something happens to your hands, for example. Imagine being stuck home while you’re recovering from your injury. It doesn’t exactly sound pleasant, right? As if that wasn’t enough, you’re probably not going to be able to work in this condition, which complicates things even further. Being insured, however, will at least let you be financially compensated for your injury and inability to work.
- Do you have some valuables you can sell?
This can be typical valuables like jewelry, silver, gold, etc., but the list of things you can sell in an emergency by no means ends there. For example, your home may be equipped with some expensive furniture or vintage musical instruments you can let go of if things get tough. While this is a good option to take advantage of, do keep in mind the items might not sell in an instant, or sometimes, you may not be able to find a buyer at all.
- When you’ve run out of options, consider getting a loan
Sometimes life can catch us unprepared, and there simply may not be enough time left to prepare a backup strategy, because the time to act is now. In cases such as these, getting a loan might be the most feasible and fastest way to get you out of trouble. Luckily, certain service providers won’t check your credit history before granting you a loan, and to make things even sweeter, they even allow you to apply online without filling out the dreaded paperwork you’d normally have to.
Conclusion
A lot of things can be resolved by planning in advance, and personal finances are no different. Have you already drafted your personal financial backup plan?