When faced with a sudden, major expense that threatens your financial security, don’t panic. Follow these four steps to get you back on the path to stability:
- Assess: What resources are available to you? Do you have insurance or an emergency fund? Determine how great your liabilities are, as well as how you found yourself in this emergency. Was it an uncontrollable accident? Or could have better financial planning prevented it? Now is not the time to feel guilty, but rather to get an accurate grasp of your situation.
- Avoid Turning to These: While loading up your credit card or taking out a payday loan might be appealing “solutions” to cover your costs, they only move the money you’re losing from one place to another, AND adding interest on top of that! It is better to draw from a savings account, or request a monthly repayment plan if you do not have the money at this time.
- Rebuild: Set savings goals to get you back to a place of financial strength. Consider what you need to pay immediately, and what you can afford to pay off each month. Incorporate your plan of action into your monthly budget.
- Prevent: Whether this situation made you wish you had an emergency fund, or cleared out your existing one, as soon as you have room in your budget, save regularly to build up this vital financial tool. If you don’t think you can afford to have an emergency fund, consider adding a second career to your plate, which can also be a much-needed safety net for a sudden job loss.
We never know what life will throw at us: All we can do is recover as best we can, and plan ahead to avoid the situation in the future. To learn more about how to improve your financial life, including embarking on an exciting second career, contact Syncis at https://www.syncis.com/blog