I'm Karen!

I am a blogger and finance coach. My specialty is helping couples get on the same financial page and win with money and marriage. 

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Debt

Financial Planning

Mastering Financial Resilience

I know that in today’s economic climate, managing debt can be a challenging task, especially with everyone talking about the looming possibility of a recession. If you are keen to master financial resilience, then read on!

This blog on Mastering Financial Resilience provides valuable tips and tricks to help you pay off debts and stay financially afloat during uncertain times.

Assess Your Financial Stability:

As economic conditions fluctuate, it’s crucial to evaluate your current financial stability and build your financial resilience.

Depending on your situation, you may need to decide whether to focus on paying down high-interest debt or building your savings. This decision should be based on factors such as your income, emergency savings, and the nature of your debts.

Mastering financially resilience

Tips for Financial Preparedness:

Evaluate Your Budget:

  • Review your budget thoroughly, considering areas where you can cut back.
  • Identify non-essential expenses and eliminate or reduce them.
  • Create a list of potential budget adjustments for future flexibility.

Look for Additional Income:

Explore opportunities for additional work or a side hustle to supplement your income.

Save extra earnings to either bolster your savings or to throw at your debt payments.

Prioritise Minimum Payments:

Ensure you make the minimum payments on your debts to maintain a positive credit score.

Set up reminders to avoid missing payment deadlines.

Managing Credit Card Debt:

Given the high-interest rates associated with credit cards, it’s crucial to prioritise paying down this type of debt. Negotiating a lower interest rate with your credit lender and understanding the details of your credit cards can significantly impact your debt repayment strategy.

Managing Loan Debt:

For personal and auto loans with fixed interest rates, continuing with regular payments may be the best approach. However, if monthly payments become challenging, exploring options like debt consolidation or seeking lower interest rates may be beneficial.

Options for Those Struggling with Debt:

Debt Consolidation:

  • Combine high-interest debts into one loan with a lower interest rate, this is deal if you have variable-interest credit card debt.

Negotiate with Lenders:

  • Did you know, you can reach out to lenders during financial hardship to discuss temporary relief options?
  • Prioritise calling your lenders this week and see if you can negotiate for reduced interest rates or temporary payment pauses.

Credit Counselling:

Seek guidance from non-profit credit counselling agencies for professional advice. I can highly recommend Christians Against Poverty – and you don’t need to be a Christian to ask for their help! 

Consider a debt management plan if needed. Read my blog ‘Dealing with Debt: Debt Management Plan’ for more information. 

Budgeting and Saving Strategies:

Creating and sticking to a budget is crucial during a recession. Follow these steps to establish a solid budget:

Identify Monthly Expenses:

List fixed and variable expenses to understand your financial commitments.

Calculate Monthly Income:

Include your salary and any additional income sources.

Use Budgeting Tools:

Utilise spreadsheets or budgeting apps to track income and expenses.

Download my FREE Monthly Budget Planner or purchase my super, simple Excel Spreadsheet for Budgeting – excellent for beginners! 

Trim Unnecessary Expenses:

Identify and eliminate non-essential expenses to free up cash.

Join my FREE Facebook Group No Spend Challenge 2024 for help and support in resisting non-essential purchases! 

Build an Emergency Fund:

Build up some savings in an easily accessible account to create a financial safety net. 

Aim for a fund that can cover three to six months of living expenses.

Regularly review and adjust your emergency fund contributions based on changing circumstances.

Read my blogs for more information on What is an Emergency Fund or The Importance of Emergency Funds. 

Coverage Review:

Assess your insurance coverage to ensure it aligns with your current needs.

Explore options for health, life, and property insurance to cover unexpected financial burdens.

Enhance Your Skill Set:

For financial resilience, it’s a good idea to have a skill, such as plumbing, car mechanic, hairdresser. So invest in continuous learning and skill development to remain competitive in the job market. These are all jobs that you can have as a side hustle, to earn extra income, on top of your regular job.

Acquire skills that align with emerging trends and industries.

Network and Professional Relationships:

Strengthen your professional network by attending industry events and networking opportunities.

Foster positive relationships with colleagues and mentors to enhance career growth prospects.

Negotiate Regularly:

I know that this isn’t easy but if you feel you can, negotiate your salary or contract terms.

Research industry standards and present a compelling case for your value to employers.

Explore Government Assistance Programs:

Research available government assistance programs that may provide financial relief during challenging times.

Stay informed about eligibility criteria and application processes. I recommend listening to the podcast Money Box by BBC Radio 4

Smart Consumer Choices:

Be a savvy consumer by researching and comparing prices before making significant purchases.

Take advantage of discounts, loyalty programs, and cashback offers to maximise savings.

Listen to The Martin Lewis Podcast from BBC Radio 5 Live – there’s always excellent consumer advice on this show! 

Community Resources:

Explore community resources and support systems that can provide assistance during financial hardships.

Local nonprofits, charities, and community centres may offer valuable resources.

Regular Financial Check-ins:

To master financial resilience, schedule regular financial check-ins to review your goals, assess progress, and make necessary adjustments.

Use these check-ins as opportunities to celebrate achievements (no matter how small!) and identify areas for improvement.

Teach Financial Literacy:

Share your financial knowledge with friends and family to promote financial literacy.

Empower others to make informed financial decisions for their long-term well-being.

Conclusion:

In uncertain economic times, prioritising financial preparedness is essential. 

Establishing an emergency fund, paying down high-interest debt, and maintaining a consistent budget are key elements in navigating financial challenges and avoiding increased debt during hardships.

P.S. My name is Karen Hackman and I’m a Finance Coach. 

My husband and I worked hard to become financially resilient and if we can do it, so can you. 

Are you fed up with living paycheck to paycheck?

Do you wish you could have a financial plan – and stick to it?

I have been in your shoes! I know the pain and the frustration!

Learn from my own personal experience, what works (and what doesn’t!), join me this year and I can help you CRUSH your money goals.

If you want to make this year the best year for your personal finances, then email me at hello@moneyandmarriage.net and let’s chat! 

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