6 WAYS TO PREPARE FOR RAINY (FINANCIAL) DAYS
Tuesday 27 October 2020
Follow these six tips to be prepared for whatever the future may bring
1 Financial literacy is key
Making the right financial decisions requires an understanding of how money can work for or against you. Even if just for an hour over the weekend, take the time to learn about money management. Principles such as budgeting, protecting your credit score, handling debt, building emergency savings, or starting a financial plan are crucial to solidify a foundation for a prosperous future. Click here for a practical guide on the basics of financial planning.
2 The art of budgeting
Knowing where your money is going is arguably the most important step in orchestrating emergency funds during crisis situations, Forbes says. Start by creating a budget to track your monthly personal expenses, regular debt payments, and household income. Not only does budgeting help you to be more mindful of where your cash is going, but it also highlights areas where spending may be curtailed.
3 Employment status evaluation
An essential step in maintaining future financial independence is to take stock of your career development. As companies adjust to new workplace relations, now is an excellent time to refocus on your goals, desired achievements, education opportunities, and professional development areas. Start by rekindling conversations with your mentor or sponsor, improve your communication skills for remote working, or reach out to your leader for training programmes offered by your company.
4 Rethink your spending 101
Depending on your circumstances, financial advisers recommend taking an aggressive approach when it comes to cutting back on spending in uncertain times, says a New York Times article. The objective is to redirect all the savings to your emergency fund to preserve cash. Do your best to minimise impulse buying by sticking to a purchase list and spending amount. Learn six smart-money habits here for better spending practices.
5 Find creative ways to save
As saving money is a crucial activity, the way to do so may not seem obvious during uncertain times. Simple approaches, such as cancelling unused online subscriptions, growing your own herb garden for cooking needs, or sticking to an affordable meal plan will help allocate hidden savings into your money jar. For more creative money-saving ideas during the lockdown, browse here.
6 Avoid debt if possible
Although low interest rates seem enticing, acquiring further debt in times of economic uncertainty is risky business. Expert advice suggests avoiding and eliminating debt as a primary target to financial wellness. For more tips on how to tackle debt, click here.