Are Your Finances Ready for Anything?
In recent months, there’s been a lot of talk about what could be next for the economy, and how the presidential election could impact the money situation for the country.
No matter what happens with the election, the economy, or anything else, you need to get your finances ready for anything. It’s not always easy to whip your money into shape, but it is possible. Here are some of the things you can do to make sure your financial situation can handle the stress of market cycles, crazy politics, and just about anything else:
Pay down your debt
Your obligations to others can hold you back no matter the situation. This is because paying interest on debt represents money you’re sending to make someone else rich. On top of that, if things go sideways, you don’t want to be in a position where people are clambering for you to pay them what you owe. While I’m comfortable with some debt, I prefer it to be low-interest debt that comes with a tax deduction.
Do what you can to create a high-interest consumer debt reduction plan and get rid of your debt as quickly as possible. That way, you have more resources available for your own benefit, and you’ll be better positioned no matter what happens with the economy.
Diversify your revenue streams
One of the best ways to get your finances ready for anything is to diversify your revenue streams. Look for ways to cultivate income diversity so you aren’t relying on a single source. If something happens and one income stream is interrupted, you still have access to other ways of making money.
While you definitely want to boost your business and make it as resilient as possible, think about other ways to make money as well. You might want to consider the types of income investments you have (rental properties, dividend stocks, etc.), as well as side gigs like speaking, consulting, or running a website. These are ways to get income from something other than your business or your “real” job. When you have diverse revenue streams, you have a better chance of getting through any economic storm.
Save for the Future
Don’t forget to save for that rainy day. Build your emergency fund and put money in a tax-advantaged retirement account. I also like using my Health Savings Account for medical-related costs and emergencies (although, be aware, if this is not used by the end of the year — you lose this money). Check with an accountant about this strategy. There are plenty of tools available that can help you save for the future. You can open taxable investment accounts to help you save for specific long-term goals as well. Having your money in different assets and setting your money aside for the future can help you stay on top of any situation, and provide you something to draw on when circumstances become dire.
Invest in Yourself
You need to invest in yourself if you want to get your finances ready for anything. This means that you need to be constantly developing new skills and acquiring new knowledge. Stay on top of your field, and learn new things. You don’t have to get another degree, but you can keep learning. Being able to adapt to new situations and move forward with your business, as well as learning new ways to put your money to work for you, can be a good way to ensure that you are ready to thrive in any situation that arises.