How to Survive Financially

In these difficult, some may say harsh, economic times, it’s more important than ever to be careful when it comes to one’s own finances.

In good times we convince ourselves that we can extend our borrowings and spending with little thought as to the possibility, some may say inevitability, of either a change in personal circumstances, or the economy in general. However, there are steps one can take to minimise the financial fallout when times change and things become tougher.

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.

We often take debt on for the instant gratification of how we think we will feel when ever we possess such an article. However, the excitement is often in the anticipation of the purchase and after we have bought whatever it was we wanted we almost instantly take it for granted, and the feelings of excitement are replaced by the worry of keeping up the payments! Would it not have been better to not have bought it in the first place and retain the security of the cash?

Banks have taken a very tough line on lending these days, so there’s no guarantee that they will be of much help should you find yourself in a financial crisis such as losing your job. One measure you can instigate to act as security against the consequences of this happening is to have the equivalent of 6 months salary saved, as this is a figure that it thought to be sufficient to see you through, and even if it’s not, the bank will be more prepared to lend money if you have some saved should you need it.

The problem with saving money is the same as buying life insurance. Both are necessary, but both are in some ways, intangible. When we make a purchase, we have something to show for it, a new motorcycle for example. In a sense, we can be averse to saving money as we don’t seem to “have” anything for it. Indeed, as our savings grow, so does the desire to blow all the accrued cash on a big luxury item, rather than keep the money saved.

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 finances is so vital. But for some, things can become too much and they have to look at the unpleasant step of bankruptcy. If you need further free information on declaring yourself bankrupt, please visit www.declaringyourselfbankrupt.org. Check here for free reprint license: How to Survive Financially.

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