Posted by on Jan 12, 2018 in Finance & Insurance | 0 questions

Do you have any funds available to enable you to survive financially if a crisis occurs? We don’t have a crystal ball and its impossible to tell when, or if any financial difficulties may happen. It’s safe to say though, that bills mortgages and daily living costs will still have to be met. It’s no use burying our heads in the sand, as a little planning now will help to reduce the impact of any future disasters.

Financial disasters may include loss of income due to redundancy, illness or sickness and injury through an accident. Thankfully there are personal injury and accident lawyers available to give advice in such cases, such as Sevey, Donahue & Talcott, who work on a no win no fee basis.

Crisis image source

To cushion any future financial crisis from occuring it’s important to start building an emergency fund today. But how do we go about saving when money is tight?

Careful budgeting

Do you know exactly how your money is spent each month? Write a list of all your essential outgoings such as mortgage payments, loans, bills and daily living costs. This will give you an idea of exactly how much income you need each month. Then list what you spent the remainder of your money on. You will probably be shocked to discover how much you spend on luxuries such as clothes, eating out and entertainment. Following this exercise write a plan as to how you will cut future spending. If you get a weekly takeaway, why not have one every two weeks instead? Do you really need a daily cappuccino or could you save money by taking a flask of coffee to work on some days?  Put aside a percentage of your monthly income into a savings account, aim for 10% every month and you will soon be able to build up an emergency fund.

Manage your debt

It is very difficult to avoid debt, in fact a certain amount of debt can be helpful in increasing your credit rating. Debt comes in many forms such as mortgages, loans, credit cards and store cards. The aim is to try and reduce debt as quickly as possible. Always pay off credit cards and store cards first as these accrue the most interest. Once you have paid off your credit cards you will be able to add the extra cash to your emergency fund.

Use comparison sites

Are you getting the best possible deal from your current utilities providers? It can be very cost effective to compare what different providers charge for their services. Usually switching to a different provider is easy, it is normally taken care of for you.

Also, check out mobile phone tariffs and TV network prices. Companies are keen to keep your custom and will usually be obliging and offer lower rates. Insurance companies are notorious for increasing premiums on an annual basis, it is therefore worth looking for a better deal when your renewal is due, if your current provider can’t match the quote you’ve been given then take your custom elsewhere.

These are three simple ways to help you build up an emergency fund today. Having an emergency fund will cushion the impact of any financial disasters in the future and eliminate the need for credit cards and loans to be relied on.