Are You One Day Away From Financial Disaster?

Are You One Day Away From Financial Disaster?

It’s a scary thought, but nearly 80% of all adult workers are living from paycheck to paycheck. As such, that means that a big, unexpected cost, a sudden inability to work, or any other interruptions to business as usual can be devastating. It’s not an exaggeration that many of us could be living one day away from financial disaster, but that doesn’t mean there’s nothing we can do about it.

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Make sure you’ve got something to land on

How would you deal with a job loss? Besides some very justified flipping out, it’s crucial you have an emergency plan to deal with it. In particular, you should budget a bit of your cash every paycheck towards an emergency fund. It can not only cover things like sudden car or home repair costs but should be big enough to sustain you for 3-4 months in the event that you suddenly find yourself on the job market again.

Have a strategy ready for debt

Debt affects all of us, whether it’s credit card debt, car loans, student debt, or otherwise. Sudden costs also make it easier to fall even deeper into debt, so it’s important to have a strategy to get back out of it, too. Click here to learn about debt management apps that can help you get a scope of the whole situation, and find out how much you should be trying to put aside from each paycheck to make sure that you can work your way out of it safely and responsibly, rather than relying on more risky loans to cover yourself.

Protect what’s most important to you

Insurance is the tool we use to protect the things that we simply cannot afford to lose or to pay for directly. This includes the car, the home, but perhaps the most important of all is health insurance. Comprehensive private insurance covers those surprise costs that might not otherwise be covered, ensuring that you’re not paying out of pocket and getting into severe debt. Find out more here about how you might or might not already be covered and look into filling in the gaps. It’s an investment that costs money, but it can be crucial for ensuring you’re not put out of work for extended medical troubles.

Know where to cut your costs

If you’re having trouble paying off your debts or finding the savings you need to protect yourself, it’s time to learn about financial hacks. Most important of all is creating an actual budget that helps you see where and how you’re spending your money every month. There are lots of little ways to save without reducing your quality of life, such as switching to store brands, using meal planning apps, and so on. Identify where your biggest costs are and use the net to find ways to cut them.

If you’re financial vulnerable, then you need to recognize what those vulnerabilities are and start learning how to manage your money and where to invest it in order to protect yourself. The main goal is to become financially independent, but these tips can help you get to that point safely.

DISCLAIMER: This post is a collaborative post and may contain affiliate links.