There’s a fine line between pessimism and paranoia, but it’s always a good idea to be prepared for the worst. With the way the economy has been, this is especially true when it comes to your finances.
So without going overboard about it, we all need a financial back-up plan. Here are some tips from DailyFinance.com that can help you be more secure in these unsure times.
1. Invest in yourself — Job security is all about making yourself a clear asset to your company. Even if you’re not an entrepreneur, think of yourself as the individual seller of a unique service: your labor. Just in case, you still might want to have an idea of other jobs you could pursue if worst came to worst.
2. Prioritize your expenses — Many of the things we think we need, we really don’t need. Look at your budget and ask yourself critical questions: “Do I really need to go out to eat? Do I really need new clothes this month? How much do I actually watch cable TV?” If you have a lot of expenses you don’t need, it may be a good idea to get rid of it.
3. Put your home to work — If you’re a homeowner, chances are your mortgage is your biggest expense, but your home is your biggest asset. Make this work for you in terms of equity, and live below your means.
4. Sell what you don’t need — A lot of people have items in their homes that they don’t need, and most of the time, you can turn those items into money. If all they’re doing is taking up space, the money is probably worth more to you.
5. Know where your money will come from — Make sure you know what investments your money is going into. From there, prioritize where you would take money from in case of an emergency. Some investments penalize you for pulling funds, and you want to save those for last.