Financial cushion: a life raft in a storm
A financial cushion is your life raft during a shipwreck - personal or global financial crisis.These collisions don't happen every day, but when they do, it's best to have something on hand that can save you and your family from poverty and extreme need.
Formation of the airbag in three stages:
Building a financial base:
Saving a small amount of money for unexpected expenses. This could be the equivalent of a few months of living expenses.
Increasing the size of your airbag:
After establishing an initial base, start increasing the size of your airbag. The goal could be an amount equivalent to 3-6 months of living expenses.
Investing for stability:
Once you have enough money in your safety cushion, start considering investments to increase your financial well-being.
Why is it important to have a financial safety cushion?
Protection from unexpected expenses: An airbag helps protect you from financial blows such as medical bills, car repairs, or job loss.
Stress Reduction: Knowing that you have a small financial reserve can help you feel more confident and calm in the event of financial turmoil.
Maintaining Financial Independence: An airbag helps you avoid a situation where you have to rely on outside sources of financial help.
Preparing for the future: Accumulated funds in a safety cushion can serve as a foundation for future investments and financial goals, such as buying a home, educating children or retirement.
Building and maintaining a financial safety cushion is an investment in your future and a means to help you overcome financial challenges by providing financial stability and confidence.
Remember that every situation is unique and your safety cushion should be tailored to your specific financial goals and circumstances.
By putting aside money for a safety cushion, you find a middle ground between being overly concerned and completely ignoring financial risks.
Investing with a financial safety cushion:
Knowing that you have a financial safety cushion makes you bolder when considering investment opportunities. This will allow you to use your money more effectively and not worry about short-term financial difficulties.
Support in the event of a loss of income:
Losing your job or having your income reduced are real situations for many people. A financial safety cushion will give you temporary support until you can rebuild your income and find new sources of income. This is especially important during times of economic instability.
Protection against unforeseen circumstances:
Life is full of surprises. Illness, accidents, job loss are just some of the possible situations that can lead to additional financial expenses. A financial safety cushion will provide you with financial support in such critical situations.
It does not take a week or even a month to form such a means of salvation!
At first glance, choosing a loan seems easier and more convenient than worrying about savings. However, it is important to remember that in times of economic instability, access to credit becomes limited and interest rates can be high. Therefore, efforts to build a financial safety cushion can bring significant benefits and save you from many problems in the future.