Nothing in life is forever, and with change comes risk towards your finances. A job can come to an end, or a large medical bill can happen, and that alone can ruin you financially. There are steps you can take, to be protected if this does happen. Consider these easy ideas to make sure that you can weather a financial storm if one were to hit.
Not a strategy as such, but personal injury compensation can be saved and invested for a rainy day! Do not waste any large amounts of money you may come in too.
Strategies to Keep You from Financial Ruin
Here are some top tips, of ways to protect yourself from financial ruin.
- Invest a portion of your salary in a savings account. This idea is fairly straightforward. You take a portion of your income, and put it aside to invest every month. When invested properly, this money will grow over time. A portion of your investment should be invested in a way that allows for easy withdrawal, if needed.
- Spend less than you make. This is something that comes up time and time again, but almost half of all Canadians are living paycheque to paycheque. By learning to live on less, and putting 20% of your paycheck away, you will have money available for when the unexpected happens.
- Cut those bills immediately. Start looking for ways that you can trim your budget. Most families have some kind of expenditure that happens each month that they rarely use. For instance, a monthly movie subscription can be canceled if it is used only once a month. It would be better to just buy the movie than to pay the yearly costs associated with many movie rental sites.
- Pay down your credit cards with the goal of not adding any new debt. Credit cards have a high interest rate that can keep you in debt for years to come.
- Use credit cards that have a cash back option. If you are a person that pays your credit card off each month, then you can benefit from the credit cards cash back option. This is like money back in your pocket after each qualified purchase has been made.
- Cancel your credit cards immediately. Contrary to the last point made, if you find yourself constantly failing to pay off your credit card the same month you make a purchase, your best bet is to really cancel your credit cards and only use debit from now one. I’ve found by solely using your debit card you make less purchases, because you feel them more.
- Get routine auto and home insurance quotes. Personal lines of insurance have rates that change constantly. It is easy to let this go for years, only to find out that you could have been paying thousands of dollars less each year if you would have just switched carriers sooner.
- Stay on top of maintenance. If you own a home or auto, do not let repairs go for too long. In most repair cases, the longer it sits broken, the more costly it can be in the future to fix it. Sometimes the amount of maintenance can add up quickly with just a few little projects.
By utilizing the tips mentioned above, you’re protecting yourself in case the economy takes a hit. Making small cuts today, can have a big impact later down the line, allowing you to have money saved up for when you really need it. Take advantage of the online tools to help you plan and find the best investment resources available for you needs today.