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10 Ways to Make Sure You Never Have to Face Financial Crisis

10 Ways to Make Sure You Never Have to Face Financial Crisis

Samuel Johnson once said, “A man who both spends and saves money is the happiest man, because he has both enjoyments.” He couldn’t have been more right. It’s not enough to earn money. It’s equally important to spend and save money wisely. On one hand, we need to spend money to fulfill our needs. On the other hand, if money runs through our hands as soon as we get it, we are in the state of perpetual deprivation and are unable to save anything for the future.

Many of us have to face a point in life at which we are in a terrible financial condition. Your savings could be low, you may have recently (or not-so-recently) lost a job, or you could lose your savings due to battling illness. There are so many possible paths to arrive at that dreadful situation, but we can surely avoid it with proper planning and forethoughts. Below are 10 ways to help you make sure you never have to face a financial crisis.

1. Maximize your liquid savings.

Liquid assets such as cash in hand, cash in currents, saving and money market accounts, and certificates of deposit are our most important financial assets to ensure financial safety. The value of these assets doesn’t fluctuate with market conditions, unlike stocks and index funds, and we can have them at our disposal any time we want, without any financial loss. Maximize your liquid savings. It’s very important to not invest in stocks or other higher-risk investments until you possess several months’ worth of liquid cash.

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2. Keep record of all your earnings and expenses.

The principal reason people face a personal financial crisis isn’t that they do not earn enough but that they don’t save enough. It’s easy to advise someone to save, but equally difficult to actually save something on your own. However, much of the trouble can be spared by keeping a record of all of your earnings as well as expenses. Keeping track of money coming in and going out will help you know if you are overspending or living within limited means. This will help adjust your expenses to align with your income.

3. Prepare your monthly budget and live by it.

When there is no bar set for tour expenses, you are more likely to end up overspending. Monthly budgets prepared at the end of the previous month can help you balance your finances. Prepare a well-organized monthly budget clearly specifying the budget for food, rent, recreation and so on. But remember, there’s no point in making rules if you can’t live by them. You also need to live by your monthly budget allocation if you want to ensure sound financial health besides setting it.

4. Keep your possessions in good condition.

Keeping your possessions in good condition is another effective way to avoid financial crisis. Keep everything you possess, from your car and household utensils to electrical and electronic appliances, in proper working condition. It costs much less for routine maintenance compared to the price you have to pay when they stop working completely, either to replace them or while repairing them. Investing small amounts to keep your possessions working will reap greater rewards in the long run, as money not spent is also money earned.

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5. Stay healthy.

Just as routine maintenance of household appliances helps to save significant amounts of money, maintaining your body also helps the cause. Most often we visit doctors only when the problems we’re facing have become severe. This traumatizes the body and requires significantly higher medical costs. With regular exercises and healthy habits, along with frequent medical checkups, you can pretty much avoid the possibility of major financial setback on the back of substantial illness.

6. Pay off your debts on time.

The best advice would be to never take any debt. But it doesn’t mean that your financial condition is doomed forever if you have taken debts. The first concern of any debtor should be to pay off all debts in full. Having existing debts doesn’t only distress our brains continuously, but also means that we can’t afford further debts, which would be necessary in the face of the adversities. So plan wisely and allocate a portion of your monthly budget to pay off the debts.

7. Safeguard against job loss.

Losing a job is the major event that leads a person to financial crisis. With the loss of job, a person doesn’t have any money to use, particularly if the person has never spared any thoughts for saving before. Safeguarding oneself against potential job loss is a chief way to avoid financial crisis. This could be done via unemployment insurance from your office or the purchase of a private unemployment insurance on your own. You can also find an alternative source of income besides your primary job.

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8. Save a portion of your earnings every month.

Saving shouldn’t be thought of as a luxury, something that you do when you feel like it. You should cultivate it as a habit. There’s no better way to save than putting away a certain amount of your earnings every month. The popular 50/20/30 rule suggests you allocate 20% of your monthly earnings for things like debt payments, retirement funds and savings. If you’re not in any debt as of now, saving 20% of your monthly income would be a wise idea. However, even if you’re in debt, save at least 10% of your earnings, as you need liquid cash in hand in case anything serious happens in future.

9. Try to minimize your monthly bills.

Just because you earn enough and are not facing any financial setback as of now doesn’t mean that the case will be the same forever. Try to minimize your monthly bills before the alarm bell rings. The focus for minimizing the monthly bills should be on cutting out unnecessary expenses as soon as possible. Look over your expenses and find out possible ways to deduct them. You could be turning on your heater or air conditioner even when you’re not home. Simply turning those appliances off when you’re not home will help reduce energy bills and thus, the monthly bills, significantly.

10. Spend wisely.

“Every penny saved is a penny earned.” You won’t be financially secure all the time, unless you are wise enough to spend wisely. Spending wisely is an art in itself. There are several techniques to spend wisely. One is to abstain from buying things you are hardly going to use. The other could be to compare prices amongst multiple vendors and go for the best deal. This could even mean spending money as an investment for the future, as the money you spend today could generate you further capitals tomorrow.

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Featured photo credit: money career upstairs/Anatoly Tiplyashin via fotolia.com

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Nabin Paudyal

Co-Founder, Siplikan Media Group

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Last Updated on August 15, 2018

30 Fun Things You Can Do This Summer Without Spending Much

30 Fun Things You Can Do This Summer Without Spending Much

Summertime can be a real strain on your wallet. The sun is out, there are people to see, places to be; it’s no wonder you might be short of funds during these sunny months. Not everything has to cost you an arm and a leg.

Take some time to go through this list of 20 cheap summer activities and make some realistic goals to complete as many as you can.

Video Summary

1. Visit a strawberry festival

Summer is prime time for tasting strawberries. More often than not, an area that grows strawberries will have a strawberry festival. Indulge yourself in strawberry pies, jams, cakes and more!

2. Have a picnic

Take your partner or your family to the local park and enjoy a relaxing picnic. Designate each person to bring one food item of their choice to add to the fun.

3. Camp in your back yard

    The summer heat can sometimes make it hard to sleep. Why not enjoy the heat outside in the yard? Pitch a tent or gaze into the night sky.

    4. Take long walks

    Discover something new where you live. Take the afternoon off from your chores and go for a long walk. You may be surprised by what you discover.

    5. Break a world record

    Breaking a world record doesn’t have to be time-consuming. You could even break one on your lunch hour. Give it a go!

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    6. Go on a bike ride

    The number of bike paths on roads in big cities has increased dramatically over the years. Take advantage, and enjoy the summer breeze.

    7. Join a gym class

      The gym is not everyone’s idea of a good time, but why not go with a friend a join a class? Spinning, yoga and step classes are always more fun with friends, and a lot of gyms allow you to pay-as-you-go.

      8. Find a new hobby

      The summer is the perfect time to find a new hobby. Serotonin (our body’s natural “happy” hormone) is produced by the sunshine and will be at a yearly high, which is great for when we want to tackle something new.

      9. Join a sports team

      Not all sports teams are competitive and require huge amounts of your time. Join in the fun with like-minded people, get fit, stay healthy and make some friends along the way.

      10. Make a slip ‘n slide

        Gather your friends, some plastic sheeting, a hose, washing up liquid if desired, and make a huge slip ‘n slide just like these guys. Granted, yours won’t be as big, but you get the idea… it’s fun!

        11. Make a treasure hunt for your kids

        Today’s digital world sees our children more often than not playing inside than outside. Why not create a sense of adventure by making a treasure hunt? Only rule? It has to be outside.

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        12. Visit a free festival

        Towns and cities are awash with free festivals, with themes from film to science. Scout your local area and discover something new.

        13. Visit the zoo

          Let’s face it: we love animals. While browsing news websites and social media networks you’re bound to come across a few pictures of cats. Take a trip to your local zoo for a better experience.

          14. Take a road trip

          Enjoy the open road with a few friends and take a road trip somewhere–anywhere. Just go out and enjoy the sunshine!

          15. Play ultimate frisbee in the park

            Frisbee is always great fun down the park, but why not turn it into more of a competitive sport by playing ultimate frisbee?

            16. Make your own ice cream

            Ice cream is a very versatile dessert. Make a sandwich, enjoy a cone, or simply just enjoy a bowl full. Better yet, making your own ice cream allows you to create any flavor you want.

            17. Invite your neighbors over for a BBQ

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              When was the last time you invited your neighbors over? Do you even know them? Now’s your chance. Just ask each person to bring a food item so costs don’t mount up for you.

              18. Get a summer job

              For many students, summer is the time for relaxation and fun. But who said earning money and being productive isn’t fun? You only get out what you put into a situation.

              19. Attend a charity event

              Attending a charity event is a great way to raise funds and awareness for a cause, meet new people, and generally have a good time. Search for your local charity event today.

              20. Visit a national park

              National parks are a great way to explore nature and learn something new. You could even volunteer and make a difference in helping restore natural habitats.

              21. Visit your local comedy club

                Local comedy clubs are extremely underrated. They are cheap to attend and no doubt you’ll have a barrel of laughs.

                22. Make your own hammock

                  Hammocks are very relaxing, are perfect for summer afternoons and are surprisingly easy to make.

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                  23. Read in your new hammock

                  Now you have your very own hammock, the only thing left to do is enjoy it. Grab your favorite book and read to your heart’s content.

                  24. Watch a movie outside

                  Movies are great. Relaxing outside in the evening is great. Put them together and you’ve got a perfect combination. In D.C, Maryland and Virginia this summer, for example, you can enjoy a huge number of movies outside.

                  25. Take a hike

                    Hikes are a great way to keep fit and see more of Mother Nature. There are countless trails available for you to explore. Why not try some this summer?

                    26. Learn how to fly a kite

                    As a child, you probably had a kite and haven’t touched it since. Why not dust it off and attempt to fly it? It’s tricky, but well worth the challenge.

                    27. Work out at the park

                    American cities are full of parks with ample space for a work out session. No doubt you’ll be happier to work out in the sun rather than a crowded gym.

                    28. Take your dog to the beach

                      One of the many joys of owning a dog is taking him or her for long walks during the summertime. This joy is enhanced when visiting the beach, for both you and your dog.

                      29. Make a summer smoothie

                      Healthy, delicious and perfect for the summer. Not only that, there are countless recipes ready for you to try.

                      30. Attend a free yoga session at the beach

                      No experience needed and all skill levels are welcome. Take yourself and a buddy down to the beach and try some yoga. You’ve got nothing to lose!

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