At some point in your life, financial problems are bound to come knocking at your door, no matter how vigilant you are with your budgeting. These can be anything from loss of income and unpaid debts to mismanagement of funds and bad investments.
The reason why these setbacks occur can also be due to the constant evolution of money. The bad news here is that these hiccups are unpredictable and damaging, no matter how careful you’re with your money.
Here are 5 common problems—with their solutions—faced by every individual who earns and saves.
Loss of Income or minimum funds
There can be no bigger risk to financial stability than loss of income. You can lose your job or be a victim of unpredictable accidents that can hinder your capability to earn. This isn’t only stressful for you, but can be a worrisome issue to your entire family as well.
Also, in some cases, the monthly salary you earn is just not sufficient enough to support your lifestyle, leaving you living from paycheck to paycheck.
So, how do you tackle this situation?
Start by listing out your expenses and finalising a budget. If you feel that money is being spent on unnecessary commodities/comforts, strike them off the list. You can also try to earn more by taking a second job or freelancing. If you have the time, sign up for technical courses online or educational institutions to improve your personal credentials. Doing this will undoubtedly open up possibilities for higher-paying jobs or a promotion.
Dealing with debts
There’s little or no money to save if you take huge debts for various ventures. Credit cards also eat up a lot of what you earn. So, the first step would be losing your credit card altogether. However, if you cannot live without one, start by paying off the credit card with the highest rate of interest, and don’t stop until the balance is zero.
Home Loan providers in India might coerce you into signing up for their policy for a property purchase. Although investing in a home is a long-term venture that can be beneficial, you can lose a lot as interest and hidden charges. To tackle this issue, start by going over every clause in the contract. Once you’re certain about how much the loan will cost you, use an emi calculator for Home Loan to figure out how you can go about repaying it. However, bear in mind that you’ll have to keep up with your loan repayments in order to avoid losing your home.
The costs of healing
Health expenses can be detrimental to your income, but can’t be ignored at any cost. These can crop up anytime, so it would be beneficial to start saving for them early. Another way of dealing with treatments and bills is signing up for insurance policies that cover the maximum number of illnesses. Insure every member of your family under a high-deductible plan in order to save money on the premium.
Your financial stability will always be at risk if you and your family members cannot reach an agreement on how the money should be spent. A conflict of values will not only encourage overspending, but mismanagement of funds as well. Sit down with your family before a week begins and plan out the expenses meticulously. There will be sacrifices and compromises, but you’ll be salvaging a lot from your income.
You need not be an expert in order to save more. Understanding the value of money and appropriate supervision of what’s being earned, and spent, are major factors that eliminate problems that can consume your income.