It might not be something many of us like to admit but, when it all comes down to it, much of our lives revolve around money. Your personal finances are always going to have a huge impact on every aspect of your life. Money is by far the most common cause of anxiety for the vast majority of people, and nothing serves to increase that level of anxiety than being forced to reevaluate your financial position. No matter what you do; there are always going to be things that affect your finances in both positive and negative ways. Of course, that doesn’t mean that you’re powerless to do anything about it. There are always ways in which you can avoid getting into serious financial trouble, even in the face of an unexpected event. To help you navigate those, occasionally rather muddy, financial waters, here are some of the more common things that might negatively affect your finances, and what you can do to keep yourself afloat during any difficult times.
Unemployment
Spending any amount of time unemployed is one of the things that the majority of people are understandably pretty scared of. After all, how many of us could really continue to live our lives without a reliable source of income. Losing your job can have some seriously far-reaching repercussions on your life as a whole. Not only does it put you in a scary financial position, but it can also affect you on a deeply personal level. This is especially true if your work was a big part of your life and identity. Without it, you can feel adrift and confused, which can lead to tensions within relationships, and even periods of depression. The biggest problem that a lot of people face is that these feelings prevent them from being able to get back out there and find a new job. It can be so discouraging to be made unemployed that finding the motivation to go job hunting can feel downright impossible. Fortunately, there are plenty of things that you can do to minimize the negative effects of being made unemployed, and most of them come down to planning. It might seem cynical, but it really is important to plan for something like this, even if things seem to be going well. Start putting money away into a savings account for this purpose alone. Even if it’s just a small amount each month, over time, it will build up and can offer you a buffer if you find yourself without a source of income. The other important thing to do is keep your resume as up-to-date as possible, that way you don’t have to spend extra time and energy on it when you really just want to be spending your time actually looking for a new job. If your resume is ready at a moment’s notice, then you can jump straight into the job hunt without any delays.
Injury
Few things in life are more traumatic than being injured in some form of accident. Of course, the most obvious thing to come from it is the physical injury itself. But a lot of people also find themselves experiences some severe psychological and emotional trauma as well. All of these things combined can make getting back into your daily routine extremely difficult. Even if your body is fully healed, your mind may not be and that can make working, having functioning relationships, and even leaving the house extremely difficult. Not only that but you may also have to deal with extremely large medical bills. Even if you can still work following an injury, those bills are going to cause your finances to take a serious hit. Again, this is a time when having some savings set aside is a great idea, anything that can act as a financial cushion for you is very helpful. But in this case, you’re almost certainly in a position to make a legal claim against whoever was responsible for the accident, whether that’s your employer or another driver on the road. Some people are unsure about hiring a lawyer following a situation like this, but when you’re put into a bad financial position as a result of someone else’s action or negligence, then you have every right to at least some degree of compensation for that.
Having a balance on your credit card
Credit cards can sometimes be a pretty risky financial proposition. Of course, plenty of people have credit cards and can manage their finances carefully without running into any problems, but that doesn’t mean they don’t come with their own set of problems and risks. The point where people get into trouble is when they start carrying a balance on their credit cards. If you’re carrying a balance on your credit cards that means you’re going to start paying higher rates of interest on your purchases. This, in turn, causes you to spend more and more on each purchase than you actually have to as the interest piles up on top of the price of your purchases. There’s nothing wrong with having a credit card, but you should always try and make sure that you pay it off as regularly as you can. That way you can avoid facing high interest rates, and you also make sure that your credit score stays reliably high. Nothing damages your credit rating more than unpaid credit card debts.
Irresponsible spending
There’s a saying that the most obvious solution is probably the correct one, and that applies here as well. A lot of the time, you may find yourself in a risky financial position and won’t be able to pinpoint why that is exactly. Nothing especially dramatic or significant has happened in your life, and you can’t quite fathom exactly what it is that could have caused your finances to take such a hit. If that’s the case, then the likeliest answer is probably just that you need to get your household spending under control. It might be down to you, your partner, or both of you, but the most common reason that people run into money troubles is simply that there weren’t responsible enough with their money. You might think to yourself “that can’t be right! I only spend a little bit here and there, surely that’s not going to put me in any danger?” But the problem with this line of thinking is that those little purchases here and there start to add up pretty quickly. In fact, if you were to add together all of those small purchases that you make over the cause of a month you’d probably be shocked at just how much you were actually spending. The solution to this problem is probably pretty obvious: be more careful with your money! Of course, some useful things can help you do this. The best thing that you can do is to create a detailed household budget. Make a clear note of all of your regular incomes and outgoings. That way you can see exactly how much you have before doing any extra spending. Once you know that you can set yourself a very clear limit on how much you should be spending over the course of a month. It’s a simple, mostly psychological change, but it can drastically change your relationship to your money. You may want to start saving as well but the most important thing at the start is just to get into a position where you’re not losing money every month. Once you’re in a position where your finances are more secure on and monthly basis, that’s the point when you can start thinking about putting money aside for a rainy day.
Money might be a cause of anxiety for a lot of people, but the most important thing to remember is that you’re not powerless when something bad happens. The biggest pitfall when you got into a situation like that is to end up feeling so discouraged that you can see a way out of it. Your finances might take a hit but there are always ways to work around it. Whether it’s through small things like cutting back on non-essentials to stick to a tighter budget, or by doing something significant like taking on a second job or relocating to a smaller property. If you’re in a financial rut, it can often feel close to impossible to pull yourself out of it, but you simply have to remember that you’re never out of options and that you shouldn’t let your money worries stop you from living your life.
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