Laura gives 5 ways to protect yourself and your personal finances, no matter what happens.
If you worry about money, that’s a sign that you need to build safety nets for your personal finances.
Here are 5 tips to stay safe:
Tip #1: Reduce Your Debt
Getting rid of debt means that you won’t have so much financial pressure if your pay is cut or you lose your job or business.
Getting rid of debt can also be the key to living within your means if you have a tendency to overspend.
Tip #2: Accumulate an Emergency Fund
Build up cash reserves equal to 3 to 6 months’ worth of your living expenses.
If that sounds too difficult, make a goal to start small by saving $100, $500, and just one month’s worth. Then promise yourself that you won’t touch that money except for a dire emergency!
Tip #3: Have a Credit Card
Having at least one credit card in good standing that you could use to get out of a financial jam (if you have no other option), gives you flexibility.
Tip #4: Manage Risk
It’s important to protect your income and assets with the right kinds of insurance like health, life, and disability.
If you don’t have insurance through work, shop online and compare quotes for private policies. The monthly premium for a term life or disability policy can be about the same cost as a data plan for your cell phone.
Tip #5: Create a Second Source of Income
Having another income stream is a smart way to stay safe if you lose your job. These days many people are branching out into new careers by taking part-time jobs, doing freelance work, or starting side businesses.
You can use the extra money to pay down debt or beef up your emergency fund—plus, you never know where it might take you!