The brutal truth is that the more money you have, the easier it will be to survive most crises. If you’re struggling to make ends meet, things will be even more difficult during an economic collapse.
In this article, we’ll look at a few tips to improve your finances so that you can be better prepared to cope with an economic crisis.
Should you lose your job or things get desperate, with a small nest egg you’ll be able to get by and be able to breathe without getting stressed out.
Savings will buy you time to find your feet when the ground beneath everyone else is falling away. It’s an unfortunate fact that more than half the people in the US barely even have $1000 in savings.
It’s time to remedy that problem and make sure you’re not one of them. Let’s get started.
•Plan your budget
This is the most important step. It may seem restrictive to plan your expenses, but in reality, a budget will give you freedom over time.
Start off by writing down all your expenses in a month.
You’ll notice several areas where you’re spending money on frivolous things. Stop smoking, reduce your consumption of alcohol, cancel your cable subscriptions, stop buying magazines and newspapers, etc.
Do whatever it takes to free up some money. Save whatever you can. The more you practice, the better you’ll get at it. It’ll be difficult initially, but once you see that you’re putting aside money, you’ll be more motivated.
This may seem like a Herculean goal to many people. Saving $5000 when you can barely save $100 may seem impossible… but it’s not. All it takes is a time and discipline. Slowly save until you hit the 5k mark.
Once you can do this, do not immediately splurge on a plasma TV or something extravagant. This is your nest egg that will tide you over a crisis.
Now, calculate how much 6 to 9 months of your monthly salary is worth. Start adding on to your 5k and aim for that amount. If your take home wage is 1.7k, you should be aiming for about 10.2k to 15.3k. Once you have hit this amount, you’re quite safe and have enough to survive an economic collapse for a few months at least.
The fastest way to increase your savings will be to eliminate debt as quickly as you can. Pay up all your credit card bills. The interest rates really add up and you’ll be shocked at how much money you’re wasting on interest alone.
Start with the card that has the highest rate of interest. Pay that one off first while making minimum payments on the rest. Once you pay the first one off, start paying off the next one with the money you usually used for the first card.
This is the fastest way to eliminate your debt. NEVER allow your balances to ‘roll over’. Paying the minimum sum on your credit card bills will make you a slave to the banks… and that’s exactly what they want.
Never spend money that you don’t have. Carry only one or two credit cards. You don’t need more than that. These two cards are for emergencies and if you do use them to buy items at the mall or online, always pay your bill in full.
•Increase your income
There’s no better way to increase your wealth than by increasing your income. Improve yourself and develop skills that are in demand in the marketplace. Charge for your services and aim to keep improving till you’re making a decent income.
The more you earn, the better off you’ll be. You can’t become rich saving off a monthly wage of 4k. You need to increase your income.
•Spread your investments
Lastly, diversify your portfolio. Don’t invest all your money in one stock or with one firm. Do not put all your money in one bank. Spread out your risk. During an economic crisis, many institutions can go belly up.
So, be wary and invest wisely. Having cash stashed away for an emergency will give you flexibility and more options should you face a crisis. Start planning and saving today and you’ll be better off tomorrow.