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It might seem like a dramatic question, but it’s one that we should take very seriously, considering that the vast majority of people are living paycheck to paycheck, with only their next payday standing between them and serious economic trouble. Here, we’re going to look at what protections you should have in place if that pay doesn’t come, you are hit with sudden massive bills, or otherwise face financial disaster.
Have some emergency cash reserves
There are valid criticisms of the notion that an emergency fund can help save you. We all have expenses to deal with and it’s very difficult to put together the kind of fund that can, for instance, tide you over if you’re out of work. However, budgeting and creating some cash reserves is essential to make sure that you’re able to put up some credit-free cash in a financial emergency.
Invest in some protections
One of the reasons that emergency funds aren’t always considered the most reliable option is that there are forms of insurance that can effectively do what they’re trying to do better. If you can afford it, then it might be worth investing in something income protection insurance from providers like https://www.basikmoney.com/insurance/income-protection-insurance/.
Know your strategies for debt
If you fall into a financial emergency, you can end up unable to pay your debts, which can cause them to grow significantly larger. The best option is to nip that in the bud. You can consolidate your debts to manage your payments of them, negotiate with creditors as soon as possible to help rearrange it or even try discharge your debt with programs like http://www.dtss.us/complete-freedom.html. However, the one thing you should never do is simply let debt continue to grow without dealing with it.
Build additional income streams
Simply put, as long as you are living paycheck to paycheck, you are susceptible to the dangers of financial emergencies. You need to improve your earnings in order to truly enjoy financial freedom. To that end, you should look at ways to additional income streams ot your life. For some people, this might mean starting a side hustle, but perhaps the most effective method to earn money without having to put too much work into it is to learn how to invest, instead.
Understand the last possible option
While it’s not something you might want to hear, bankruptcy is a viable option should the above methods not work and you find yourself falling further and further into debt. Bankruptcy can discharge a lot of debt at the cost of any assets you have, and it can also help you avoid harassment from creditors, as well as stopping foreclosures for a time, as shown at https://www.nolo.com/legal-encyclopedia/chapter-7-13-bankruptcy-limits-benefits-30025.html/.
To put it simply, being able to recover from a financial disaster is an ability that most people do not have without all of the tips above. For that reason, it’s important to start putting preparations in place as soon as possible.
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