How to Prepare for Financial Challenges
Financial concerns have the potential to keep us awake at night. Unfortunately, most of us wait until a crisis is upon us before we get busy. Do what's best for you and your family and prepare now. You’ll sleep better at night knowing that you have plans in place for contingencies.
Begin using these strategies now – before a financial challenge arises – and you’ll lessen its negative impact on your life:
1. Have sufficient savings. Set aside enough money in things like checking and savings accounts, money market accounts, and short-term certificates of deposit to cover 3-6 months of living expenses. You should have this in place before you begin investing money elsewhere.
Some benefits of these accounts are that they don't fluctuate with market conditions, and there is no tax penalty for withdrawing the money, unlike retirement accounts.
2. Make a budget. If you don't already have a budget, there's no time like the present to get started. The first step to making a real change is to measure where you’re at right now.
Developing a budget will provide you with the information you really need to take control of your spending and free up funds for saving.
3. Consider how you would reduce your monthly expenses. You don’t have to make changes now, but tak