Preparing for disaster doesn’t just mean having a bug-out bag and evacuation plan in case of a natural disaster. Disasters can be personal and small-scale, too; for example, inflation resulting in increased utility and food costs, job loss, or unexpected expenses (such as car replacement, medical bills, family issues,…). Being prepared for a personal financial disaster is something that everyone should consider – because it can happen to anyone! Put your mind at ease with these 3 ways to prepare:
1. K.I.S.S. (Keep It Super Simple) – This is easy: reduce your expenses and eliminate your debt. Money you save should then be put in a secure place to which you have easy access. There are many easy ways to save money.
2. Multiple Streams Fill the Well Faster – This is also true regarding income. When you rely solely on a job to pay your bills and then you suddenly lose that job (perhaps to downsizing, acquisition or a troubled economy) it could be a disaster for you. Set up multiple streams (or sources) of income to reduce the impact of that disaster. Active income (wages, commissions,…), Passive income requires no regular effort (such as rental income, royalties, certain online revenues,…), and Portfolio income (interest, investments, capital gains,…). You should have all three types. The idea is that when the flow from one income stream stops or slows, you have another income as backup. Extra streams of income also help in paying off debt faster and growing your emergency fund.
3. Stay Healthy! – Illness can hurt you physically, mentally and financially. You could encounter time off work, medical bills,…So, keep a positive attitude, stay fit, eat healthy, rest as needed, and feel secure in being prepared!
You can survive anything with the right mindset and a little preparedness!