By TobiasIn these troubled economic times it pays to take deliberate steps to avoid financial mishaps and crises. The general economic situation makes it more necessary than ever to avoid financial crisis. How should you do this, get cheap health insurance, sell your house and get a cheaper one, insure yourself against unemployment? Financial crisis on a personal level can be prevented or at least made much less likely if you take various simple steps. These simple steps can help you avoid financial mishaps of various types.
Plan and Budget Well
Financial planning and budgeting are a good way to avoid financial crisis and upsets. You can sit down with a pen and paper and write out all your monthly or annual expenses, your income, any tax information, and anything else that affects your finances and get a much clearer sense of where you are financially. You can also use various computer programs to do the same thing. This is an essential step in getting on firm footing financially. You need to have a good sense of what is going on financially in your life in order to maximize your advantages and prevent confusion and monetary mishandling. The budget you write out need not be hugely involved, but it should cover all the basic areas of your finances and deal with expenditure versus income. It might also include investment ideas, ways to reduce costs, and auxiliary measures in case there is some unexpected financial trouble.
Find the Least Expensive Basic Items
Purchasing and using the least expensive items can help reduce your budget considerably. This can be anything from the car you drive to the way your heat your house to the food you buy to the insurance you have. Basic items are things that you need on an ongoing basis. This may seem like a “no brainer” but it is quite possible that you are not saving as much in your ordinary expenditure as is possible. You may be able, for instance, to find excellent used clothing rather than going to a discount store and buying cheaper clothing that will wear out faster. Or you may be able to find cheap insurance of one sort or another that is perfectly adequate, such as health insurance. The way you save money says a lot about how well you understand how and where to save it. Try finding deals in unexpected or less accustomed areas of your finance and you may find that you can save more than you thought.
Safeguard against Job Loss
Losing your job is the classic event that can really cause you to have a financial crisis. Thus it makes sense to have one or several means of guarding against this. One way is to get unemployment insurance. You should be eligible for some kind of unemployment compensation from your local employment office. Make sure you understand clearly what your rights are here and what the stipulations are. You can also purchase private unemployment insurance if necessary.
Another way to guard against the problems associated with job loss is to have alternate income sources available. You might, for instance, start a part time small business from your home that could become full time if necessary. Or you could get some training in another field that could enable you to get a job in that field should the need arise.
Keep Car in Good Condition
Keep your vehicle in good shape by having regular tune ups, fixing small problems before they become bigger ones, performing routine checks (such as the oil and other fluid levels) and driving your vehicle responsibly. Keep in mind that if your car breaks down, this can affect many other areas of your financial life such as being able to get to your job. Cheap insurance for your car is a reasonable way to save money, but augment this with good preventative maintenance of your car.