Staying Afloat During Financial Downturns – How To
We are all facing the times when thinking of personal finances staying afloat is a big challenge. It takes goodwill, time, and perseverance. However, with a clear goal and plan to stick to, everything is achievable. Here are the proven ways of beating financial downturns.
Determine your goals and anticipate big expenses
Setting concrete goals and achieving them is a great motivator and can contribute to your budget’s good management.
These objectives can be various and should therefore be personalized according to your profile.
The idea is not to put excessive pressure on yourself or to deprive yourself of everything to accomplish your goals at all costs, but to make sure you progress and get richer, if only a little, in the long run!
Finally, anticipating large expenses is essential in managing your personal finances. That’s why you should build up and always keep precautionary savings.
Usually a few thousand euros, this emergency fund will allow you, in the event of a hard blow (job loss, etc.), to avoid a situation of great financial difficulty from which it could be difficult to escape and to hold out until normalcy is restored.
Make sure to have alternative source of income
The internet today is full of many techniques that allow internet users to make money without leaving home. Contrary to what you might think, making a profit on the internet is not that difficult. One condition: find the technique that works. Rounding off your ends of the month legally with the internet without being scammed is possible in 2021. You, too, can understand how to earn money on a daily basis.
Realize your small business idea
You might have a small business idea nestled in your mind for a long time. You can start making it true and earn money from it. Start selling your ideas, products, or services by writing ebooks, selling online courses, or opening your shopping store on some eCommerce platforms such as Shopify, one of the most popular ones.
Financial markets at your fingertips
Also, all kinds’ financial markets are at your fingertips thanks to the internet and many trading platforms. Making the second income with trading on financial markets such as stock, foreign currencies, or commodities is now available to anyone willing to try their trading skills. As by far one of the most liquid markets, Forex markets enable you to make decent income just by investing several hours a day in trading activity.
The first step would be to look out for the brokerage website. There are a multitude of these platforms, and most of them are great. Bearing in mind that selecting a Forex broker that suits your needs is the crucial factor of success, make sure you are going for the best one. Before venturing into real money trading, go for a demo account to practice the trading and learning the ropes.
Set yourself relevant budget rules
Willingness alone is not always enough to stay the course. Therefore, imposing budget rules on yourself and automating some tasks can go a long way in helping you achieve your management goals.
For example, you can start with a monthly payment of all your expenses to have a better view of them and anticipate more precisely the outflows of money to come. Nowadays, all energy bills can be monthly, just like taxes.
To meet your monthly savings goal, you can also automate the transfer of 10 to 20% of your salary to your savings account. This “forced saving” will protect you from the temptation to spend that extra cash before the end of the month.
Moreover, make it a rule to never go into debt to consume. Avoid consumer loans, even when buying a vehicle, to avoid paying hundreds or even thousands of euros in interest on purchases that sometimes only require a few months of savings. Be patient and protect yourself from the vicious cycle of debt.
Finally, you can optimize your budget by reducing or renegotiating your credits and bills (Internet and telephone subscriptions, energy bills, etc.).
Although small sacrifices (heating a little less, consuming less water …) and tedious steps (contacting your Internet provider, canceling an unnecessary subscription …) can be off-putting, the sums thus saved each month are not negligible!
Smartly balance your finances
Effective budget management requires an intelligent allocation of your expenses. Implement the rule consisting of dividing your budget into three main categories to which you allocate a certain percentage of your capital: 50% of your budget for basic expenses, 30% of your budget for leisure and pleasures, and 20% of your budget for savings and investment
This balanced budget method can be personalized according to your objectives and your income.
Regularly analyze your expenses
To assess how you spend your money, set a monthly or even weekly date for regular check-ups. Using a money management app where you can easily monitor your progress and change your goals. Group your expenses into categories to identify any unnecessary expenses. It is often small, repeated, and unnoticed expenses that prevent you from saving every month without you even realizing it!