Home Business, Politics, and the Economy Preparing for A Financial Disaster

Preparing for A Financial Disaster

0
Preparing for A Financial Disaster

Six earthquakes in seven days.

This was the reality of residents of Trinidad and Tobago in October 2018.

That same month, rain dumped the equivalent of one month’s rainfall in just three days, resulting in severe flooding and dislocating hundreds of families who lost just about everything in their homes. Internationally, the examples are too numerous to mention, with rising sea levels, violent earthquakes and super typhoons. So much is transpiring across the world, we begin to wonder,

Are catastrophic natural disasters striking more frequently?

Whether we want to accept it or not, the earth’s climate is changing before our very eyes, and the effects are glaringly all around. But natural disasters aren’t the only disasters we ought to be concerned about. So many of us have had to face the truth of other calamities in our personal lives, whose effects are immensely and equally jarring. A sudden job cut, an unexpected health challenge resulting in significant medical expenses or major household repairs, can quickly and easily deplete our savings and send our finances spiraling out of control.

natural disaster

While we will never be able to accurately plan for and predict every single event in our lives, we can surely put a contingency plan in place in the event that things go awry. The truth is, those who are the most successful in life haven’t necessarily been dealt the best hand, rather, they understand that they will continuously face uncertainty, and have resolved within themselves that they can only control what is in their power to control.

Below, I will present some very practical strategies you can employ before-hand to ensure  that you are better prepared, financially, in the event that of a natural disaster.

Diversify your revenue

diversify your revenue disaster

We’ve heard the age old saying; “Don’t put all your eggs in one basket” so many times that it’s only falling on deaf ears. But I urge you to take heed. Diversification doesn’t only apply to the nature of our investments (for example: mutual funds, fixed deposits, stocks, bonds etc.) but it also extends to our streams of income. Consider the following: What are your skills and abilities? What does your society need? What do your friends/colleagues constantly compliment you on? Get creative and find ways to turn your skills into a profitable business.

Limit your monthly expenses

budget disaster

Chances are when you check our monthly recurring expenses, you will find that there are many things you can do without or significantly reduce. Maybe that cable bill can be cut? Ask yourself if you really need that data plan for our phone? Will you shrivel and die if you don’t buy that new outfit? Lastly, deciding to cook from home more often as opposed to eating out just might make the world of difference, not only for your health, but also for your pockets.

Save that extra money at the end of the month

savings disaster

We’ve all probably heard of the importance of saving approximately 15% of our salary and setting up a standing order to ensure that money is automatically transferred. But in addition to this, I am certain that there will be some months where you wind up spending less than is customary or you get a rare windfall (eg. BONUS!). If you leave that money in your account, readily available, chances are, you will find yourself spending that money the following month. Why not transfer that extra money, as small as it may be, out of your account and into a separate savings account before the next month’s salary hits your account? Over time, this habit makes quite a difference.

Manage your Credit Card

credit disaster

You’ve probably heard it: Credit cards are the devil! The truth is though, they aren’t as evil as they are sometimes purported to be. If they are not well managed, then that 85.60 × 53.98 mm laminated plastic has the potential to drive you crazy. The annual interest rate on credit cards is astronomical and can run as high as 25%. Other fees can include over limit fees, late fees and cash advance fees. If used wisely and responsibly however, a credit card can actually work in your favour. Depending on the type of card chosen, it can assist you in enjoying other luxuries in life, like travelling the world.

As with many natural disasters, financial upheavals can be disruptive and sudden, striking unexpectedly. However, with a proactive and prudent approach to financial management, the agonizing effects can surely be minimized.

LEAVE A REPLY

Please enter your comment!
Please enter your name here