The UK’s financial landscape doesn’t look very encouraging for investors at the moment. Monthly sales have declined sharply in the retail sector and the picture becomes further bleak if we add in the uncertainty surrounding Brexit.
Following are certain steps that households must take to prepare themselves for the next big bang:
Build a Buffer
Putting together a savings fund is the best thing that a household can do to brace the impact of a financial crisis. It ensures that a family doesn’t have to go out seeking credit in times of emergency.
For some time every household should save whatever they can in order to build a cash reserve that makes them put up with difficult economic times. It is also a good way to protect you and your family from suffering the consequences of being bombarded with unexpected expenses.
Experts believe that your emergency fund should be such that it suffices for at least three to six months worth of expenses. It is also important that you do not lock away your money in a fixed asset and hold it in the form of cash so that you can access it as and when you need it.
Make a Budget
Having a clear oversight of what your weekly and monthly expenses are, is the best way to prepare for future financial uncertainty. Having an idea about this you will help you to know how much is coming in and how much is going out and it will also acquaint you with ways in which you can cut back unnecessary expenses.
Look for Ways to Earn More
Having some extra opportunities to earn will be good if things ever get tight. You can fall back on your secondary income and there’s no better time to bring in extra money into the house than in turbulent economic times.
Besides taking up an extra job you can also think of putting up that extra furnished room in your house on rent. Imagine how much it would help your situation to have an extra income of up to £7.5k which is free of income tax under the Rent a Room Scheme.
Overpay Your Mortgage Where Possible
It may be easier said than done, but overpaying your mortgage give you many options. It ensures that you do not have to keep paying heavy instalments, even if the housing industry collapses and there is a financial crash in the future.
First time buyers are likely to have a small amount of equity in their home. Which means that if prices fall by 10 percent they may have a debt which can be greater than the worth of their property.
Being in negative equity can make moving home a difficult task. It can also affect your ability to remortgage. You may find it difficult to switch to a cheaper rate. By overpaying on your mortgage you can gain more equity in your home and subsequently reduce the overall amount of debt that you owe.
Minimize Monthly Outgoings
It can be easily said that enough measures haven’t been taken by the Brits when it comes to finding the best deals on household bills. Rectifying this simple bit can help them save hundreds of pounds each year.
If you are looking to ease your budgeting over the next few months you can look into moving to a better rate for banking, phone, energy, broadband and other such expenses.
You should take some time out of your daily schedule to perform a full review on your savings, borrowings, assets and overall financial position and ensure that you shop around to get the best deal for your family as well as for yourself. Individually these savings may seem too small to begin with but they will certainly add up to a huge sum.
The financial section in the newspaper is something that most of us turn the quickest. But in difficult economic times, keeping track of what goes on in an economy can prove to be useful in unpredictable ways.
In these times it is equally important to take steps towards safeguarding your wealth by putting in place important documents such as writing a Will using a free online Will kit.