There are numerous factors which can affect your finances, so it’s vital you take steps to protect yourself in the event of markets crashing, environmental disasters and financial institutions folding. With the right planning and preparation, you can ensure you’ll be able to ride out any fiscal difficulties. Try these tips to make sure you’re prepared for a personal financial crisis…
Know Your Budget
When you’ve got extra cash to spend, you might not worry about your budget or how much your essentials cost. However, it’s important to know how much you need to survive each month. Examine your expenditure and calculate how much your essentials, such as rent, insurance and food, come to. Once you know how much you need to survive, you can determine how long your savings would enable you to pay the bills if you suddenly found yourself out of work or in-between jobs.
Build a Side Business
Bringing in an extra source of income can help protect you against financial difficulties. Whether you sell items on online marketplaces, act as a consultant for other firms or take on a second job, building a side business gives you added protection against job losses and pay cuts.
However, it’s important to check any existing employment contracts you’re a party to. Your current employer may have a clause which prevents you from giving competing businesses advice, for example, so don’t let your side business affect your main source of income.
Check for Unclaimed Money
Millions of dollars is lying around in bank accounts, tax departments, pension funds and life insurance firms, and it could all be claimed by individuals like you. It’s getting easier to check whether you have any funds which are unclaimed, and you can seek help from a professional like attorney Andrew Schwing to help you get the job done. Unclaimed money is one of the easiest ways to prepare yourself for a personal financial crisis. As well as claiming what you’re entitled to, accessed unclaimed funds allows you to reduce your debts, add to your savings or invest your cash elsewhere.
Check Your Insurance Policies
The right insurance polices can prevent you from suffering a personal financial crisis, so it’s essential you have the appropriate polices in place. With the right medical insurance, for example, you can ensure that any unexpected medical bills will be covered and that you won’t be hit with costly excess fees to pay. Similarly, a damaged vehicle or property could prevent you getting to work or leave you with nowhere to live, so decent insurance policies are important to protect your assets too.
Reduce Your Debt
If you currently have outstanding debts, such as loans or credit cards, reduce them whenever you can. Paying large amounts of interest can become difficult to maintain, and it could lead to a financial crisis. Switching to better interest rates can be a good way of making the debt more manageable and enabling you to pay it off more quickly.