It’s always advisable to plan ahead for any unexpected expense
This way, you won’t be surprised when the time comes. Being prepared for a financial emergency isn’t always easy, but you can prepare ahead of time. Here are some tips to help you stay safe and secure.
- Never use credit cards if you don’t have cash
Credit cards are great tools to help us get what we want today, but they can become dangerous when we need them the most. If you’re using your card to make purchases, then you’ll be able to pay off those charges later. However, if you run out of money before you’ve paid back the balance, you could find yourself paying interest rates much higher than normal. It’s best to keep some cash around just in case of emergencies, and avoid using your credit cards at all costs.
- Don’t let debt control your finances
Debt isn’t always bad. There are many people who rely on their credit cards to finance their daily lives, and it helps them build wealth over time. But if you feel like you need to take on too much debt, you should consider cutting down on spending. You can start by looking for ways to cut expenses where possible, and look into budgeting apps to help you stay organized. Once you have a handle on things, you can begin repaying your debts.
- Know What You Can Afford
Before you start saving up for emergencies, make sure you understand how much you can realistically afford to save up each month. There may be certain things you just can’t cut back on, but you shouldn’t be spending more than you earn either.
Go beyond assessing your monthly expenses and building your savings accounts
According to the Federal Deposit Insurance Corporation (FDIC), nearly half of Americans don’t have enough savings to cover three months’ expenses. This means they don’t have enough cash to pay their bills and deal with emergencies. If you aren’t saving money now, you’ll never be ready for a crisis.
When life gets busy, we tend to forget about our financial situation. We put off paying bills and putting away cash until later, when we run out of time. This often leaves us with no choice but to borrow money to cover them, which can quickly spiral into a debt problem. If your finances are already stressed, adding more stress by failing to make payments can really hurt.
Investing in your financial security comes in the form of having a trusted financial advisor like Corey Kaster from Inbundance Wealth Management. Your financial stability doesn’t come from motivation or for pure luck, it depends on having the proper knowledge and discipline. Let Corey help you to get out of financial hardship.