Financial security means living comfortably without worrying about debts or expensive bills. It also means having a decent amount of cash put to the side in case of emergencies so that, no matter what happens, you always have finances to fall back on. Unfortunately, even in ordinary times, maintaining financial security can be difficult. No matter how much you try to cut back on spending or save, you might still find that your money runs dry by the end of the month. Throw in a financial crisis – like the one the UK is currently experiencing – and it becomes even more challenging.
What Economic Difficulties is the UK Facing Right Now?
Going into 2023, the UK is on the brink of a prolonged recession. This is following months of inflation which has affected households and businesses across the country, particularly regarding rising energy prices. Currently, families are struggling to afford their food shopping or energy bills, and many businesses are having to shut down premises because of the costs. Even pay rises feel like pay cuts.
Amid this current financial crisis, you might feel uncertain about what’s to come. So how can you ensure your financial security when everything costs more money? While this time is going to be undoubtedly hard, especially in 2023, there are actions you can take to ensure you stay financially secure no matter what.
Protecting Your Income
In these trying times, protecting your income is essential. What happens if you sustain an injury and can no longer work? What about if you get sick? These circumstances don’t have to be your financial downfall, not when you invest in income protection each month.
Income protection works by paying a fixed monthly amount (how much depends on your personal circumstances). Then if you have an accident or get sick to the point you can no longer work, you will receive a monthly payment to cover your income loss. Usually, this will be between 50-65% of your regular income, with other payments like government funding making up the rest. This type of security is critical in 2023, when everyone already faces financial difficulty. You need to know that no matter what happens, you have enough money entering your bank each month.
Building Savings
Building savings during a financial crisis might seem near impossible, but it’s vital to ensure you have an emergency fund. It matters even with income protection, as you never know when you’ll need to dip into an emergency fund for an unexpected bill or financially difficult month. Plus, income protection often comes with a delayed period (usually between four weeks and a year), so savings would be highly beneficial during this time. If you’re struggling to save, check out Readers Digest for expert advice.
Seeking Financial Advice
Do you need help navigating the current financial climate? If you don’t know where to place your income for ultimate financial security, consider seeking professional financial advice. A financial advisor can assist you with building an emergency fund, investing in the best insurance for you, and lowering your outgoings each month.
Remember that this financial crisis won’t last forever. Plus, while maintaining financial security might feel like an uphill battle, there are still ways to ensure you have enough money to get by each month while protecting your future. With the right income protection and emergency savings, you always have a backup plan throughout 2023 and beyond.
