For the majority of people in today’s society, there’s no escaping going through a financial change at some point in their lives, such as a pay rise, job loss or even insurance pay out. Sometimes, multiple changes in financial situations can occur – it’s simply something that comes along with the often unstable financial climate.
So, if these changes are inevitable, is there a way that we can effectively prepare ourselves for them occurring? Luckily, the answer is yes; the majority of the time, financial changes can be predicted and adaptations to our spending habits can be made to accommodate for those changes.
Here’s our advice for planning for a big financial change!
Determine How Your Income Will Change
Financial changes aren’t always necessarily negative, but it is always good practice to understand how your weekly, monthly and yearly income will be affected by the change. Will you need to cut down on your spending, or will you have more money at your disposal to be able to complete those tasks that have needed funding for a while?
Good or bad, you will need to assess how different your income will be and how this will affect how much money you will have access to each month. Make sure that you have all your essential financial outgoings covered, such as rent and bills, and then work out where you can afford to spend a little less… or even a little more!
Change Your Spending Habits Before It Happens
Once you have determined how your financial situation will be affected, it’s time to start implementing the changes that you have identified as essential to your finances. Your financial change might be a few weeks or months off, but the sooner that you make these changes, the easier it will be to cope when the change finally arrives.
Making the changes to your spending habits while you still have some money to play around with will help you figure out how feasible they are without having to worry that you can’t afford to live sufficiently.
It gives you a trial period to work out any additional changes and perfect your new spending habits!
If you have managed to work out how to change your spending habits and have them already in place, you’ll already be well on your way to saving some money.
If you are reducing the amount you are spending from your monthly income, why not put what you don’t use into a savings account and start a savings pot that you can fall back on should you need a little extra cash?
Even if your financial circumstances are changing for the better, why not set aside some of the extra income you will be receiving; you never know when you will need to pay out in an emergency, so having savings that you can easily access is a great way to protect yourself from any unexpected financial payouts you will need to make!
It is possible to protect yourself from a financial change, and the more prepared you are for it, the easier you will find it to cope with your new financial situation. However, should you need any help with your finances of need someone to talk to regarding a debt management plan, feel free to give us a call today and one of our experts will be happy to assist you and suggest some feasible ways to deal with your financial change.