By Brian McKay
According to recent research, there are two alarming statistics about the adult population in the UK. The first is that 40% of the population is one paycheck away from potential homelessness. And the second drills down a little further, by highlighting that millions of UK citizens have less than £100 in the bank.
If this sounds familiar, it should be of concern. These are not small stakes. And, given that tens of millions of people are going through the same thing, it is easy to see why so many are worrying about the economy.
However, there are likely to be good reasons why you are suffering from this sheer financial stress. And today, we’re going to take a look at them. Here is why you are only one paycheck away from financial ruin.
Your financial planning sucks
The primary reason you are struggling is likely to be you don’t embrace financial planning. Knowing where your money goes is the key to securing your future. There are solutions, however. Apps like YNAB will help you start tracking your finances and even help you make savings.
You aren’t saving anything
The key to sound financial planning is to view savings as an expense. It is not a luxury. Every household should be putting something away - however little. You will need an emergency fund, of course, to deal with any disaster that might come your way. And you have to stop relying on credit as your only means of emergency backup. If you can’t pay off your debts in full at the end of each month, you will be incurring more debt. You should also be saving money for your retirement. If you think things are hard now, wait until your income drops when you can no longer work. If you make it that far, of course.
You think you are invulnerable
An accident will never happen to you, right? But even if this proves true, what happens if your partner or child is involved in a serious accident? A traumatic brain injury from something as simple as falling off a bike can have a significant impact on everyone’s life. Of course, as ASB Aspire Solicitors point out, you might be able to claim compensation. But what if you lose your case? You might have to stop working to look after your family, and your entire life can change complete direction. So, if your savings won’t see you being off work comfortably for at least three months, you might be in big financial trouble.
You don’t have insurance
Other disasters can happen, too, of course. Fires, thefts, vandalism, natural disasters - the list is endless. If you don't have insurance, it will be down to you to pay for all of those replacements. Or, you’ll just have to go without. You can probably live without your iPad, of course. But what if your laptop or work tools are destroyed or stolen? Will you still be able to earn a living? Get insurance for everything of value in your home and workplace. It will have you from ruin if these scenarios ever arise.