1. Create an emergency fund
Creating an emergency savings fund may be an afterthought for many Australians that are faced with tight budgets, but it is something that can be considered. A survey by BT financial group found that 1 in 5 Aussies have no savings to fall back on. Constantly re-evaluating your budget can show you which areas you can cut down on or how to maximise your money in various areas. The key is to put aside what you can realistically afford, which goes hand in hand with setting a realistic budget. Discussing budget cut backs with your partner can also make your goal for opening and maintaining an emergency fund possible.
2. Keep track of your expenses and debt
Setting up a budget is winning half the battle. Keeping track on how you spend your money, your expenses, and ensuring that your debt is paid off is another essential key. This can help you stick to your goal of maintaining an emergency fund without creating more financial problems. Start off by paying off the small amounts of debt and slowly work your way to paying off the bigger ones. This can help to make the process less intimidating. This can also paint a realistic picture of how much you can put aside.
3. Consider taking out a personal loan
Unfortunately, there are situations that are beyond your control that may require lump sums of money. This can leave a hole in anyone’s budget and could possibly lead to a debt spiral. Taking out an emergency personal loan that is specifically created to take care of such scenarios is something that you can consider. However, it is vital that you check that it comes with features and terms that are suitable for your financial circumstances. Speaking to a financial advisor or a broker can help you make an informed decision on whether a personal loan will work for you.
4. Could your credit card get you in trouble?
The type of credit card that you have can either be a blessing or a bane to your existence. According ASIC, Australians owe $45 billion in credit card debt. One of the reasons that Australians fall into credit card debt is because of owning the wrong card. Having the wrong card can mess up your budget and can lead to emergency expenses popping up. It is vital to check if the credit card you own comes with the best possible rate and features that work for your circumstances. If not, it is time to consider a swop to a card that does more for you.