It’s not always a smooth ride when it comes to managing personal finances.
Bumps in the road can derail your plans if you don’t take steps to protect yourself
and stay on top of the situation. Here are some strategies that can help.
There are a number of difficulties you can face on the journey through life.
Some events that can negatively impact your personal finances include:
of a spouse
cut or reduced hours
repairs (including home or auto)
Plan, Prepare and Protect Yourself
You can prepare financially for most of these situations. Combining approaches
to create multiple layers of protection is even better.
Insurance. A good home or auto insurance policy can help lower
expenses related to an insured event such as a theft, fire or accident. Health and
disability insurance can cover some costs related to illness or injury. And
life insurance can assist your family in the event the unthinkable occurs.
Umbrella policy. If you’re worried about major accidents and lawsuits
that target your assets, an umbrella policy can protect you in a way that a regular
insurance policy might not. An umbrella policy’s coverage generally picks up where
home and auto policies leave off.
Emergency fund. Set aside money in an emergency fund to cover expenses
without having to rely on credit cards. This dedicated account can also help you
withstand investment losses as you wait for a recovery or adjust your strategy.
Maintain good credit. Should you need
a loan to help with certain setbacks, having good credit can go a long way toward
ensuring access to lower rates and more affordable terms.
With the right planning in place, you have a better chance of weathering
financial storms. Take action before you’re in the middle of a crisis if at all
Additional Tips for Managing Financial Setbacks
Don’t panic. Take a moment to stop and breathe. It can be difficult
to make decisions at this time, but it will be harder to think clearly if you’re
Look for community and state resources. If you can access a food pantry, apply for unemployment
benefits or connect with other programs, it can free up necessary cash to deal with
a crisis. Remember that these services are meant for times of distress. Consider
returning the favor for others when you get through this setback.
Take care of yourself. Do your best to eat healthy, get adequate sleep and
exercise. You’ll make better decisions and have greater resiliency when you practice
Do some research. There’s a plethora of articles
and advice online, but seek out only reputable sources of financial information
— not chat rooms or social media.
Seek social support. Get emotional support from friends and family who won’t
judge you. Find people who can serve as a sounding board as you work through financial
The Bottom Line
Seek information and advice from reliable sources as you navigate financial
setbacks. Your WellCents financial professional can be a value resource to help
you plan and pivot to adjust your financial strategy to help weather whatever storm