“Beware of little expenses; a small leak will sink a great ship.” – Benjamin Franklin.
It makes perfect sense to listen when a genuine polymath speaks about life lessons. We hope we tipped you off to the article you’re about to read!
According to studies, over 1.5 million people in England alone suffer from debt and mental health issues. Half of those in serious debt (46%) also have a mental health problem. The numbers aren’t very different in several other regions across the world. Covid induced financial stress has only made matters worse.
We’d be fools to ignore all of that data and statistics blaring in our ears. But does it make a difference?
Imagine waking up one day to find that all of your bills are due, that you need to pay the mortgage you took out months ago for your lovely dream house, and that your family is experiencing a medical emergency. What do you think you should do now? You are aware that life can be quite unexpectedly unpredictable at times.
It contains some unfavorable twists and turns. Naturally, you were all prepared for situations like this. You also saved money by keeping this in mind. Okay, you saved, didn’t you? NO? Is that frightening? Naturally, it is. Return to sleep because you never want this to happen; it’s nothing short of a nightmare.
According to a nationwide survey conducted by the Agewell Foundation, 65 percent of India’s older generation rely on others for financial support and face financial fears. While we do have a close-knit, community-centric society, these numbers aren’t pleasing to look at. So how can we skip such a situation and avoid financial mistakes?
How to take control of your finances
According to 86 percent of respondents in a Money and Mental Health survey of nearly 5,500 people with mental health problems, their financial situation has exacerbated their mental health problems.
We all have financial fears, but worrying accomplishes nothing. Facing your fears and taking action helps to eliminate them. Let us take control of our finances before they take control of us. Making the first call to get you started on the road to financial security is sometimes the most crucial step. Let us overcome our financial apprehensions and make it a way of life that will help us avoid jeopardizing our financial future. How are you able to do this?
- Not being able to save enough: if you believe that the only way to save money is to make more money. Then think about it carefully, and you might be wrong. Because it has nothing to do with how much money you make and everything to do with how much money you save.
The significant disparity between your income and expenses is what makes all the difference. It would be best if you first determined your wants and needs and then spent accordingly.
- Unemployment: Unemployment is a terrifying thought. And it’s challenging when all of your bills are due, and you rely on your paycheck. So, now that it’s gone, what happens? Rainy days are unanticipated.
For such worst-case scenarios, it is critical to plan at least a three-month budget. And, because you are unemployed, this is an excellent time to reflect on yourself and develop new skills that will enable you to generate multiple income streams.
- Unfavorable financial situation: Yes, an unfavorable financial crisis can take any form. A medical emergency, an unanticipated bill, an unexpected family event, or a friend in need of financial assistance
Such financial storms can only be avoided if you are prepared for them, which you can do by keeping your investment portfolio, which is the centerpiece of a well-constructed long-term financial plan, in good shape.
Your investment strategies must be tailored to your specific goals, risk tolerance, and timeframe to not only stay on track but also to avoid emotional decisions that can derail your plans.
- Never getting out of debt: when you have debt (credit card or others) that has been due for a long time, and you don’t know how you’ll ever get out of it by paying it off – that sense of helplessness or lack of control can be fairly damaging. The first thing you can do is accept the situation rather than flee from it. Accepting it implies not incurring any new debts, which will only exacerbate the situation.
You can prioritize the ones with the highest costs and pay them off first, which may include unsecured loans such as credit card bills. The timely repayment of EMIs is essential to avoid incurring new debts and avoiding unnecessary expenses.
If you think your situation is dire, you can seek professional debt counseling services to help you create a budget and set spending limits. Use whatever method works best for you to avoid debt traps and put an end to your worries.
After all, you would never want to be concerned about your money and how you keep it. At Salt, we understand. It’s why Salt is on a mission to bring neo banking to everyone, reduce banking costs and allow you to leverage the benefits of a leaner, cleaner model. Check us out at the Salt website.