Saturday, September 17, 2016
Protecting Your Finances From Life's Ups And Downs
When we talk about your finances, we talk about all the money you have in the world. Your ‘net worth’, as they say. If you’re not in the minus and saddled with debt, you’re still not in the clear. Life has a way of throwing some huge curve balls at you. If you’re not protecting your finances from those curve balls, it can put you in the minus pretty quickly. So here are a few ways to protect them.
Be future oriented
It’s easy to get stuck in the here-and-now. To juggle costs without thinking too much about the future. You might not even think you can afford to look to the future. But that’s short-sighted. If you’re not preparing for education costs, housing costs and retirement, you’re setting up to fail. You need to create a budget that specifically leaves room for the big long term goals. Otherwise, you’ll miss them entirely.
Set up a rainy day fund
We mentioned a budget because they’re the best way to find more ways to protect your income. By knowing and cutting what costs you can, you leave yourself room to use your money in ways that are going to do you some real good. For instance, putting together a rainy day fund that you can dip into whenever a big cost is coming your way. Don’t let said cost take from your everyday spending. Have a fund set up as a buffer, instead.
Don’t spend when you don’t have to
Of course, you won’t need to dip into any of your savings if you don’t have to spend the money in the first place. We’re not talking about cutting down on your costs even further. Instead, we’re talking about protections that will stop you from spending money entirely. Protections like the right insurance on your home, health and car. Having contact with legal teams like Dolman Law Group when those big costs aren’t your responsibility. Don’t spend when it’s not your fault.
Take care of your credit
Some people think that credit is something that should never be touched. They’re right that credit is important and has a lot of far-reaching, surprising effects. But it’s also a tool. If you’re in need of money, quick, it can provide just when you need it. That’s why you should avoid debt, yes, but also keep a line of credit open. Whether it’s an overdraft, credit card or otherwise. Use it sparingly to keep that credit score healthy, but keep it open in case you find yourself needing it.
Diversify your income
One of the best ways to protect your income is to have more of it. No-one likes to think about preparing to lose their job. However, diversifying your income could be the step that saves you in that event. There are a lot of different ways to do it. Picking up side hustles is a favorite of people who like to be active in their earning. Meanwhile, investing is another crucial step to becoming financially savvy.
It’s all about having as many strategies to protect your essential spending money as possible. Set up roadblocks between life and the money you need. That’s what will help you stay safe.