If you have been listening carefully, you may have noticed that economists and business leaders have been talking about the possibility of another global financial crash for a while now. With recent global events, the truth behind these rumors has all but been confirmed. It is now high time that we start taking measures to protect our money so that we are insulated against what are sure to be belt-tightening times ahead. Here are six tips to make sure your savings are safe in the coming months.
1. Budget Carefully
Keeping a tight reign over your weekly and monthly incomings and outgoings should be a key part of your crisis preparation plan. If you have a good idea of exactly where your money is going, it will make it much easier to identify areas where you can cut back should you begin to feel the pinch.
2. Run a Buffer
Many people are comfortable with using their credit card or overdraft as a financial security buffer in times of economic prosperity. A much better and more secure way of ensuring that you keep your head above water is to build up a cash reserve that you can draw upon if you suddenly have to fork out for any unforeseen expenses.
3. Shop Around
When your budget is tight, it makes a lot of sense to spend a little more time looking for deals than you might do normally. Check to see if there are any coupons available on the internet before buying as expenses saved on the small things will add up over time.
4. Pay Back Your Credit Cards
If you owe money on your credit card, now could be a good time to sign up to a cheap fixed-rate repayment scheme. When a crisis hits, the banks can suddenly decide to change their interest rates, leaving you high and dry and unable to keep up with your monthly repayments.
5. Sell High-Risk Stocks and Shares
All stocks and shares represent a certain degree of risk. If you are not prepared for the possibility of losing some money every now and again, then you probably should not be buying them. If you are aware of the risks, however, you will know that certain stocks are much more secure than others. Now is a good time reinvest your money in stocks which have proven to be “recession-proof” in the past (e.g. Walmart or Hasbro Games).
6. Overpay on Your Mortgage Repayments
If you are a first-time buyer with a large mortgage when the bottom suddenly falls out of the property market, you could end up having to pay back a lot more than what your house is worth in the post-crisis real-estate environment. If you start paying back as much as you can now, the impact of a property market collapse on you will be less.
Unfortunately, rough times look like they could be just around the corner. Make sure you keep your finger on the pulse and do not act too late when it comes to taking actions to protect yourself from the risk of financial ruin.