It is just a few years since the USA, along with most of the rest of the world, went into recession. Americans saw the value of their homes slashed, the banking sector in crisis and unemployment rise to double-digit figures. People were caught out and some lost their jobs and their homes in what was an unexpected turndown of the economy. As it was so sudden, most people were totally unprepared but this has made them more wary about the future.
There is always emergency cash when extra money fast is needed, to be had, but equally, there are numerous things you can do to be ready in case something like this, or any other unexpected financial crisis, affects your life. Here are a few of them…
Open a savings account and put a little each month aside. Keep it totally separate from all other investments, such as your retirement funds or any other savings you have that are for a specific reason. If you can eventually make this reach the level of 6 months mortgage and other living expenses, it will give you a breathing space should the worst happen. Do not put it into an account that restricts withdrawals, as you may need to get instant access to the funds.
Look For Other Jobs
This is not a suggestion that you leave your current employment but that you are aware of how the job situation is in your particular field. You may find that you perhaps need some extra training now, as the jobs require a higher level of qualification. This could be the case more so if you have been in the same job for many years, and are able to do it efficiently because of experience rather than education.
While you have the time, go to night school and get the extra qualifications that will help you find other work. Then you will have double the advantage over many other candidates, experience and qualifications.
While finances are not too bad, clear as many debts as you can. Get rid of those credit cards that cost you a fortune every month, and any subscriptions you no longer use. Reducing your monthly outgoings will make it easier to build your emergency fund, and once that is done and the debts are cleared, your finances will be in a much healthier position.
Take advantage of the credit cards that offer six months interest-free for swapping to them. Keep your monthly payment the same as with your old card and you will see a real drop in the balance over that six-month period.
The other alternative is to pay off the credit cards with a bank loan. This will be a cheaper rate of interest and for a fixed period. Whichever you do, make sure you cut those credit cards up and don’t fall into the trap of borrowing on them again.
Just these three things will make it so much easier for you to cope if there is another financial crisis, whether that is a personal one or a national one. Even if that =never happens again, you will find it easier to manage financially from paycheck to paycheck and have the security behind you for peace of mind.