There’s no denying it; today’s current economy is under threat. Financial uncertainly is no longer just a problem for entrepreneurs and emerging business – now it’s a problem for every Brit. With financial uncertainty looming economically and with your own personal financial challenges at play too; how do you ensure that you are always prepared and that you don’t find yourself in a tricky financial situation?
Financial uncertainty is typically brought on by natural disasters, economic conditions (recession), illness, unexpected expenses, lifestyle shifts (divorce or death of a loved one).
1. Preparing for an Uncertain Financial Future
There are 5 simple ways that you can be better prepared for financial uncertainty:
1. Stay one step ahead.
While it’s natural to get caught up in our own lives, it’s far too easy to get distracted and lose track of what’s happening in the economy. If you see that the economy is heading for a recession, it’s time to minimize expenses and cancel non-essential services and accounts. Stay one step ahead to safeguard your financial future.
2. Know your emergency loan options.
When financial crisis strikes; your finances may take an immediate knock. There’s no need to drain your savings and investment accounts to cover the sudden impact on your finances. Look into emergency loans such as those offered by Multi Month Loans. These are paid out quickly and are even available to people with a less than perfect credit score.
3. Diversify – start a side-hustle.
It might seem normal to rely on one income source, but when financial futures are uncertain, it is better not to put all of your eggs in one basket. According to the Independent, 40% of Brits have a “side hustle” to make extra money. It doesn’t have to be a full on business, but does need to generate additional money for your day to day living, or for emergency savings. Some popular side hustles in the UK include dog walking, house sitting, Airbnb, online tuition, delivery services, and so on.
4. Get minimalist with your budget.
It’s part of the human condition to have more than we need and to want more than we need too. If you want to ensure that you are minimally impacted on during a time of financial uncertainty, you have to need as little as possible. It all comes down to your monthly expenses. Make a comprehensive list of all of the expenses and debts you pay off each month. Then, strike off services and items that you don’t actually need in your life. Ridding your budget of non-essential services is important. Next, take a look at the permanent expenses that you just can’t get around. Contact each provider and request a better rate. If you cannot get a better rate, shop around for alternative suppliers and providers to cut back on expenses.
5. Build a nest-egg.
Financial uncertainty is exactly that; uncertain. If you don’t have a savings yet, now is a great time to start saving towards an emergency fund or nest-egg. Contribute to the savings each and every month as if it’s an expense. It doesn’t matter if you can only afford £10 each month, that’s a start. Try to keep this nest-egg growing in a high interest bearing account and ensure that you don’t dip into it for non-essential spending. The UK Money Advice Service gives some great advice on how to build an emergency fund here.
Preparing for financial uncertainty is absolutely essential. While faced with financial uncertainty or when in the middle of a financial crisis, it is important that you keep preparing for future uncertainties too. Sounds like a hard task, but if you put your mind to it and commit yourself to it; it is absolutely do-able.