Although these events may be “unexpected” as they occur, we should plan for the unexpected.
The way in which we foresee and prepare for such events will determine our ability to cope with and recover to a financially healthy state.
Unfortunately, a large proportion of our population are unprepared to handle a financial crisis. Whether this is due to a lack of skills to manage finances prudently or ignorance of the warning signs or some other reason, the bottom line is that many suffer devastating consequences in such situations.
A number of strategies you may consider implementing now to protect yourself and/or your business are:
- Prepare a budget with goals and strategies, then use this as your roadmap.
- Build or allocate an emergency cash fund amounting to a number of weeks or months income which will cover your highest risk events.
- Scrutinise unbudgeted purchases carefully before you commit to them, to assess the benefits and the stresses.
- Implement guidelines to control credit card purchases, to ensure you are able to fully pay the balance each month.
- Consider consolidating debts and negotiating interest rates and repayment options with your financial institution.
- If you are experiencing a cash flow difficulty, communicate with your creditors straight away. They are most likely to respect your openness and be willing to negotiate a payment plan with you. Be prepared with an achievable proposal and honour it.
- Put in place effective collection procedures for your income to ensure you actually receive your cash.
Implementing these and other strategies will strengthen your financial position, and provide you with peace of mind.
Omar Palov
From WTC Financial Services
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