It’s been said that money makes the world go ‘round. But when a financial crisis strikes, your life doesn’t have to stop in its tracks. You just need to be responsible with your finances in order to survive in the event of an economic depression.
In a financial crisis, the key to survival is to save. Start a savings and investment account and put money into it regularly. When you get your paycheck, set aside the amount needed for your daily expenses and deposit the rest to your account. If you get a bonus, rather than blowing it all off, save at least half of it for your account. Even keeping a piggy bank at home can be useful. Collect the change that you have each day and drop them into the piggy bank, and then you can take all the change that you’ve collected in a month and deposit them to your savings. As they say, every little bit helps.
Unemployment is one of the major problems that you might encounter during times of economic turmoil. In such an event, it is good to have an emergency fund saved up to live on should you happen to lose your job. Ideally, you should have 3 months worth of your income set aside. If you cut down on your expenditures, you should be able to survive on this much money for about 4 to 6 months until you can get back on your feet. However, it is advisable that you don’t put this fund into a single investment vehicle. As the saying goes, don’t put all your eggs in one basket. Placing money in several types of investment vehicles exposes you to various ways of investing, allowing you to understand which ones yield low and high interest rates. It is also advisable to save or invest in different financial institutions as there are institutions that shut down during a financial crisis.
It is important to exercise wisdom in managing our expenses at all times, most especially during an economic crisis. One helpful measure is to write down all of your expenditures so that you can keep track of what you are spending your money on. Cut down on unnecessary expenses. There’s nothing wrong with spending for recreation, but with the economy experiencing hard times, you should learn to spend in moderation. Your money is better served for necessities such as paying the bills, and putting what’s left over into your savings. If you have incurred any debts, they should all be paid off as soon as possible, so that they do not pile up and eat up much of your earnings.
Another thing that should be avoided is using your credit card to pay for expenses that should be paid for in cash. There are, of course, certain instances when paying with a credit card may be necessary but you do not have to use it to pay for everything. You can just as easily buy groceries with hard cash. And just as you shouldn’t throw your money away on unnecessary expenses, neither should you whip out your card on a whim for things you could do without. Money is hard enough to come by without racking up debt for trivial purchases.
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