Building wealth sure does take a lot of time and effort. However, there are some events that crop up as an emergency and drain your financial resources. You are not prepared for the inevitable and before you know it you have lost a lot of money. It is here that you should take the onus and gear up now. Before emergency strikes, you should have a rich bounty of money safely tucked away to cater to it!
The need for financial planning
Brian Ferdinand is a financial consultant with over 15 years of rich experience when it comes to financial planning during emergencies. He says it is important for you to understand the need for saving up for a rainy day. This applies to both businesses and people. You never know what might happen in the future. It is prudent for you to be prepared and keep aside a portion of your income in an emergency fund every month. This will save you when you are struck by an event where there has to be a huge expense of money, he says.
Controlling debts and increasing funds
Most people tend to forget that credit cards have huge amounts on interests on them. They buy things and know they can pay later. This is an immature thing to do if you really wish to eradicate debts from your life. Emergency financial planning also means being prudent with your expenses and not using your credit card to buy the first thing you like. Always remember at the end of the month, you have that bill to pay. In case you miss one month, the interest rates will start mounting and you will be faced with a heap of debts. So, prevention is better and only use your credit card unless necessary he says. In case, you miss payments your credit score will go down and this will be a blot on your credentials especially when background checks are made for diverse reasons in the nation.
Creating the emergency fund
The trick here is to keep at least 4 to 6 months of your monthly income in a separate savings account you will not touch. This means if you have not started to save money, you may do so from now. You do not have to keep aside half of your income- remember you have monthly expenses to bear. It is important for you to at least keep aside 20% of your income every month. With the passage of time, you will find your emergency fund growing. This will not only enhance your financial stability but it also will give you the much needed peace of mind you deserve.
Brian Ferdinand says small steps are just needed to create an emergency fund. If you do not have one now, do not panic. You can start from today and watch your balance increase. You should also spread this message to your near and dear ones. This will help them to be financially secure in the future too!