Recent economic conditionshave demonstrated how easy it is for us to get caught out with our finances, and demonstrated how important it is to maintain tight control of our spending.
We all try and tighten our belts when times get harder financially. Sometimes we take on financial committments when times are good without giving considered thought to the distinct possibility that times may change for the worse, putting us under severe financial strain. If we took the time to think ahead however, there are things we can do in the good times, that help in the bad times.
Think of this – how long would you survive if you lost your job? For many, the idea of budgeting is abhorrent, a restriction on one’s lifestyle. A sudden change would send perhaps a negative signal to friends that you are not as well off as they thought.
Whilst we like to give others the impression that we are doing well, we cannot kid ourselvs forever. Rather than live on a finacial knife edge, it is sometimes preferable to be prudent if only for peace of mind.
Depending on your spending patterns, most financial advisers agree that having savings equivalent to six months salary is sufficient to get you through, should you lose your main source of income. It may be that you have plans to start a business and take control of your life that way, in which case you will need a good deal more, mainly for working capital as business takes time to start generating money. OK, you can get a loan from the bank, but banks are getting very tight with whom they lend money too these days, so having a reasonable amount of liquid cash is good for any scenario.
Saving money is often considered by some to be boring. Not only do we not have anything to show for it, we can also feel that saving is a form of deprivation, and we end up either chipping away at it and consequently our savings do not grow, or just giving in and buying a new, expensive item, inspired, in part, by the common thought that “I’ve never had so much cash saved before, now I can afford….” whatever it was they wanted.
Mental attitude is often what prevents us adopting a safety first approach, in many things in life. However, this can be most common in our attitudes to saving, we see it as something negative, something that when done, has decreased our amount of disposable cash, and is therfore stopping us doing those things we want to do. Particularly in todays “must have” society, the word is spending, not saving. However, with a little bit of mental adjustment this perception can change. Focus on seeing saving as something that provides security. For example, imagine what it would be like to be a street sleeper. Treat saving as a way to avoid that situation. Associate cosy images in your mind with saving – it doesn’t happen overnight, but with practice you will find your perception changes.
The more you can acheive this type of association, the more your perception of saving will change.
Keeping track your money is so important. But for a few, things can get out of control and they are forced to look at the unpleasant step of bankruptcy. If you need further free information on declaring yourself bankrupt, please visit www.declaringyourselfbankrupt.org. This article, Finance Worries – How to Survive has free reprint rights.
categories: Bankruptcy,Going Broke,destitute,Finance,liquidation,asset sale,legal
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Tags: asset sale, Bankruptcy, destitute, finance, Going Broke, legal, Liquidation