When you lose your job, have to get a new car or spend a lot on your old motor, fix your boiler, it might feel like someone has pulled the ground from under your feet. While it is impossible to avoid money emergencies, you can get prepared for them and develop a helpful coping mechanism instead of falling into debt or making bad decisions. Below you will find out what smart people do when facing with financial troubles.
This is a contributed post and do not necessarily reflect the opinions of Meet The Harris Family.
Backup Savings
Smart people have backup savings, so they are not forced to take out a loan at an extortionate rate. If you can save up a set amount each month, you will be able to do the same. Set a saving target for each month and for the year in total, so you can deal with car repairs and a broken boiler, or maybe pay off that finance you have on your car. Things happen and they can ruin your finances if you don’t have backup savings.
Creditworthiness
People who are able to manage their finances efficiently maintain a good credit score. If you want to become financially free, it is important to get the best deals on current accounts, mortgages, and loans, and a lower rate on your cell phone contract or insurance. You can monitor your credit rating and your accounts performance for free if you sign up with some of the agencies, but you will have to usually pay a monthly fee to see all the details and score factors.
Side Work
Whenever you need that cash boost, you might want to take on more work. While your employer might not be able to offer an instant pay rise or overtime, you can have a couple of side work accounts ready to use for when you need it. Get an extra source of income by signing up for WeGoLook, Freelancer, or Fiverr. There are, obviously, other ways of earning extra cash as well, but these are giving you the flexibility you need to keep your day job.
Price Comparisons
You shouldn’t be too loyal to your bank or loan company when it comes to protecting your budget. While you might have been with your finance company for years, they might take advantage of your custom and increase their prices. Before they take out any financial product, smart people look on price comparison sites and check out sites such as Auto.Loan to get the best deal for their circumstances. When your circumstances change, you should look for ways to reduce your repayments and get a refinancing deal.
Prioritizing
Smart people also know how to prioritize their commitments, and make sure that they don’t fall behind with payments on their mortgage, insurance, and car finance. Think twice before thinking about a large expense to see how you can budget for it instead of increasing your debt.
Smart people know how to make the most out of their finances and make money work for them instead of simply working for money.
