Getting ahead of the game – how to ensure financial stability!

Recent events in the world have certainly taught me an important financial lesson. That lesson is: ‘always prepare for the unexpected.’ Of course, that is not always so easy to do when the paycheque seems to shrink or disappear altogether despite all our best efforts.

What about those who are self-employed? It might be even harder for persons who have to rely on funds that are earned on an irregular basis. Then there are those swimming in debt or those who have recently lost their source of income.  For these groups, being financially secure seems to be an impossible task.

Is there any hope for financial stability among those groups?

Planning

Before any financial constraints, it is vital that everyone whether self employed or not start a saving plan.  It is vital that we make preparations now before the challenges arise. This can be done in a variety of ways, there are fixed deposit accounts where the funds are held for a specific fixed term and early withdrawal would incur penalties.  The threat of a penalty would discourage withdrawals and restrict access to the funds.

I also found it beneficial to save with other financial insinuations such as credit unions, that were different from where the bulk of the funds were stored.  This made it less likely that I would dip into those funds as it was directly taken out of my salary.

If you are not self-employed but you have a skill, it is also beneficial to have another stream of income along with your main job.  This will allow you to have a cushion if for any reason you lose your main income.

Self-employed persons also need to plan ahead by having a back up plan if their income gets affected by unexpected financial challenges. This might mean keeping a substantial sum of money — perhaps the equivalent of three to six months of your earnings — inaccessible cash savings should you need to cover your mortgage or other bills if a client is late paying a significant bill or work slows.

Budget

As a self employed person your revenue might be sporadic or erratic. Be prepared for this by working out the minimum income you need per year and writing a detailed budget. Saving as much as you can afford and sticking to the budget will help you through any rough patches.

This is also an important activity for those who have a salaried job. The job market can be very fickle and despite being competent at their position, due to circumstances beyond their control, persons sometimes find themselves unemployed.

So don’t be caught unawares. get ahead of the game and ensure that you are financially secure!

What’s your take?  Are you prepared? Drop me a line below!

Teri Ann Renee Paisley

Gleaner online writer

Tags: budget, employed, financial