Handling unexpected financial emergencies requires a mix of planning, resourcefulness, and informed decision-making. Here are some smart ways to manage such situations:
EMERGENCY FUND
The best strategy is to have an emergency fund. This should ideally cover 3-6 months of living expenses and be easily accessible.
BUDGET ADJUSTMENTS
Review and adjust your budget to cut non-essential expenses. Temporarily reducing discretionary spending can free up funds.
LIQUIDATE NON-ESSENTIAL ITEMS
Consider selling items you don’t need. This could include electronics, jewellery, or other valuables.
Emergency funds create a financial buffer that can keep you afloat in a time of need without having to rely on credit cards or high-interest loans.
USE OF CREDIT WISELY
If you have access to credit lines or credit cards, use them wisely. Ensure that you understand the terms and interest rates to avoid worsening your financial situation.
PAYMENT PLANS
Contact creditors or service providers to negotiate payment plans or extensions. Many are willing to work with you during hardships.
INSURANCE CLAIMS
If your emergency is due to events like accidents, natural disasters, or health issues, check if your insurance policies can provide financial relief.
GOVERNMENT ASSISTANCE AND COMMUNITY RESOURCES
Explore if you’re eligible for any government relief programs or community assistance during your crisis.
SIDE JOBS OR FREELANCING
Consider taking on temporary work or freelancing to generate additional income.
FAMILY AND FRIENDS
As a last resort, consider borrowing from family or friends. Be sure to treat it as a formal loan and communicate clearly about repayment terms.
FINANCIAL COUNSELLING
Seek advice from a financial counsellor or advisor. They can offer personalised advice and help you plan for the future.
INVEST IN EDUCATION AND SKILL DEVELOPMENT
In the long term, improving your skills can lead to better job opportunities and higher income, making you more resilient to financial emergencies.
REGULAR FINANCIAL REVIEWS
Regularly review your financial situation to adjust your savings and spending, keeping potential emergencies in mind.
Remember, personal finance is personal. Your priorities and goals will dictate how you manage your spending, so tailor these steps to fit your unique situation.
Learn the fundamental concepts of how budgeting and saving are important to your financial well-being. Registration is now open for the course: Mastering Budget and Saving Techniques. This is a hands-on course with me guiding you on how to budget, track and look at managing your money like a pro.
ENTER THE CODE WORD: BUDGETING2024 to get $100 off this course.
Before you start the application process, we need to assess your financial situation to ensure you are eligible for a home loan.
2. Determine your affordability:
What I do next is work out your borrowing potential and calculate how much you can afford to borrow.
3. Find the right lender:
Depending on your own financial situation, credit score, and other factors, I research the extensive list of lenders on my panel to find YOU the right lender.
4. Pre-qualifying you for a home loan:
Pre-qualifying you can help understand how much you can afford and make the process smoother.
5. Explain the different types of loans and features available:
Part of my role is to ensure you know the various types of home loans available and help you decide which one is best based on your individual financial circumstances.
6. Assist with the paperwork:
As a mortgage broker, I work with you to help gather all the necessary paperwork and documents required for your home loan application that a lender requires.
7. Guide you through the application process:
Walking you through the application process and explaining the various steps involved are all part of the process.
8. Communicate with the lender:
As the intermediary between you and the lender, I handle all communication with the lender on your behalf to ensure the process moves smoothly and provide any additional information the lender may require.
9. Staying up-to-date on mortgage rules and regulations:
As a mortgage broker, it’s essential that I stay informed about changes to mortgage rules and laws that may affect you.
10. Provide ongoing support:
Even after your home loan is approved and long after your new loan has settled, I will continue to offer support and guidance to help you manage your home loan and navigate any issues that may arise.
Want to have a chat about refinancing or obtaining a new home loan? Reach out to me at karen@harkenfinance.com to see how I may assist you.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Buying your first home is a BIG and important step in your life. This guide is here to help you in becoming home loan-ready before applying for a home loan. Get your free copy today!
If you had the magical power to change your life into what you really desired it to be like, would you exercise that power?
Of course, you would!
First, you would have to strip away the fantasy and then you would have to get down to the nuts and bolts of what you would really want for yourself.
Most people, for a number of reasons, never get past the fantasy stage.
Some are not aware they really could make the change, while others are too lazy or throw up excuses and complaints. After all, change does requires effort.
So get really serious for a moment and ask yourself ………….. are you prepared to do the work to achieve the life you truly desire?
Are you?
Let’s do a little exercise for the moment.
I want you to imagine you are now 90 years of age.
Yep, a little wrinkly possibly still living at home or moved in with loved ones or maybe you’re living in an aged care facility.
Take a moment to imagine your older self.
Now what you’re going to do is write down all the things you have done, experienced and achieved up to this point. Remember you’re writing it down as a 90 year old!
You’re going to write down all the personal fun you’ve experienced, romantic partners, the adventures and holiday you’ve taken, the homes you’ve lived in, the cars you’ve driven and the lifestyle you created for you and your family.
Once you’ve written what you’ve experienced and achieved, next write down how this makes you feel.
So, how are you feeling, are you smiling and feeling happy with joy or maybe you’re laughing to yourself that you’re a little exhausted about a life well lived?
Did you live the life you had always hoped and dreamed of?
What did you achieve in those last 50 or so years of your life?
Did you live the life you truly wanted and desired?
Were there many memories and fun times?
Did you get to travel to some exotic places?
Have you lived a very comfortable life and without money concerns?
Is it fun to be able to spoil your family with the money you have accumulated during your working years? and
Is your heart warm with joy from being able to have given to the many charities of your choice?
If you’re looking back and happy with what you’ve achieved – well done this means you’ve worked hard, made the right choices in how you managed your money so you didn’t have to worry about money during your retirement years.
Now is the time to make the change. Time to get your money sorted and working hard, while you continue accumulating during your working years.
The 3 keys ways to do this is to;
SAVING. Keep putting a certain amount away (minimum of 10%) at payday into a set and forget account.
BALANCE. Ensure your spending is well under your earning capacity, and not spending more than you earn.
GROWING. Learning how to grow and invest your money while you work by making additional contributions into your superannuation fund.
Here in Australia, we’re fortunate as it’s compulsory for Australian employers to put a percentage of an employee’s salary into a nominated super fund.
For my overseas readers take advantage of the superannuation opportunities offered in your country while you can, as this will boost your retirement options considerably.
There are other opportunities to grow your wealth either by investing in direct shares, managed funds or looking at property investing.
Whatever investment option you choose make sure it’s one that you’re comfortable with and you sleep easily at night not worrying about what happens when the investment market moves up and down.
Looking for more support, education or help in getting your money in better shape then check out the online programs I offer which teach anyone how to build financial muscle before it’s too late.
Also, check out my monthly coaching program which is super affordable and enables you to get your questions answered while learning more about managing money to your advantage.
