For education members, those curveballs can be especially hard-hitting.
Wage freezes, reduced government funding, pay grid restructuring, job loss, or interruption—any of these have the potential to significantly affect your cash flow.
Things such as an unforeseen car or home repairs can be costly, particularly if you’re lower on the pay grid or are living on a single income. While you might not have a crystal ball to predict the future, having a financial action plan in place will at least provide you with a proactive (versus reactive) way for handling financial curveballs, when they come your way.
Having an emergency fund in place puts you in a better position to stay afloat when the financial waters get rough—without having to rely (solely) on credit cards or other forms of debt. As a rule of thumb, you should aim to have 3 to 6 months of expenses saved up, just in case.
Regardless of whether you’re working full-time or are occasional/support staff, debt repayment can take up a big portion of your monthly cash flow. If that cash flow was to suddenly lessen (or stop altogether), it could be even more challenging to continue making those payments. That’s why the time to have a debt repayment strategy in place is when you have regular income coming in.
The typical budget consists of a healthy balance of ‘needs’ (rent, mortgage, food, etc.) and ‘wants’ (eating out, travel, hobbies, etc.). Should things suddenly get tight financially, your typical budget won’t apply. Knowing your basic budget for this scenario (e.g., exactly how much money is required to cover the essentials) will enable you to immediately identify where to cut back (or cut out).
It’s important to protect your credit rating by continuing to pay down debt/bills on time. Consolidating high-interest debt can be a possible solution to help free up some much-needed monthly cash flow.
If your debt is under control, but haven’t had the time to build up your emergency fund, consider getting pre-approved for a secured home equity line of credit which can serve as your ‘financial emergency backup plan’, should you need it.
Working exclusively with education members since 1975, we’ve supported your community through many changes and challenges over the years. That kind of history means we have a genuine understanding of the unique financial aspects that make up your world, such as pay grids, pension contributions, and collective bargaining. So if you find yourself suddenly faced with the unexpected, we’re in a great position to help you financially prepare better than anyone else.
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