To be financially secure is probably what most of us are looking for, and if we’re already secure, we’re looking for ways to feel even safer. Because life is so unpredictable and we never seem to be able to plan for everything, that sense of security can come and go in the blink of an eye – and the more we have to fall back on, the safer we feel.
This is a contributed post. Please refer to my disclosure for more information.
Here is a handful of tips on how you can boost that feeling in your own financial situation and plan for a future that looks both brighter and more stable. It’s not done overnight but it will definitely be worth it, in the long run.
First: Focus on an emergency fund
While you probably know very well that you should have a goal in terms of savings, a plan to get debt-free, and income enough to cover your expenses, the emergency fund is the pinnacle of financial security.
When you manage to have all of this, there is nothing life can’t throw at you that you won’t be able to bounce back from. In general, an emergency fund should consist of between 3 to 12 months worth of savings – enough to keep you going for a while, in other words.
How much you’d like to put in is up to you, just make sure that you’re able to cover yourself for a while in case you should be out of a job. Even if your emergency fund keeps running empty due to all of the emergencies in your life, you’re still doing it right – just keep saving.
Next: Find suitable insurances
Another way to safeguard yourself that goes beyond emergency funds is, of course, to have comprehensive insurances. If you have some that are able to cover you in case you should lose your job, you won’t even have to spend anything of that emergency fund – and can continue to save it for another occasion.
There may be a more comprehensive insurance than the one you currently have, by the way, and even a few that you didn’t even know you might need. Have a look at Qdos Contractor, for example, and learn more about professional indemnity insurance.
Work out a new budget
Finally, you should keep in mind that your budget needs to change according to how your finances change. That doesn’t mean that you should up your spending, however, even though it’s difficult not to – when your income increases, you should try to increase your savings as well.
That way, you will be able to see your savings account grow much more rapidly than you would have if you just stuck to the same plan you had a year or so ago. Continue to grow, save, and put aside money for those emergencies – and you’ll never feel financially insecure again.
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