How to prepare for a personal financial crisis?

June 4, 2010 by Victorino
Filed under Personal Finance Tips

Sun Tzu of the Art of War once said, in time of peace prepare for war and in time of war prepare for peace. He also stated that a victorious commander is one who makes more calculations. Applying this ancient Chinese wisdom in personal finance, we can tell that a crisis can be overcome by wise calculations and advanced preparations. A financial crisis sometimes attacks anyone without a warning. This happens when unexpected events like health failure, sudden loss of a job, and repair needs of our properties give us money troubles. Thus, an advance anticipation and preparation to minimize the troubles should not be ignored and must be given full and constant attention. But how do we prepare ourselves to deal effectively and efficiently with any financial crisis in the near future?

Prepare your pocket
First, because we are talking here financial matters, we need to prepare our pocket, our wallet, our bank accounts, or our financial capacity. In times of financial crisis, we should see to it that we have built an emergency fund which we can get funds to help us pay our emergency expenses. Setting up an emergency fund can be done gradually yet it should be consistent. We can also place that fund in a savings account to earn interests yet still unrestricted. We can also save other things aside from money that can help us in times of financial crisis. These include stored foods and supplies, which we can spend while you still don’t run out of bucks.

Prepare your mind
An alert mind is a great mind. A financial crisis is an occurrence that is irregular. In times like this, we need to have our mind prepared for this tough situation. That’s why we should fill our brains with all the advanced personal financial solutions we can use when financial troubles happen. This can be done by making strategic plans, budgeting and forecasting.

Prepare your emotions
If we need to set up our mind for the anticipate crisis, we also need to prepare our emotions. Our emotional behavior can play an important role in difficult financial situations. We cannot ignore our feelings, especially because this is our human essence. May people who are emotionally weak usually don’t survive a very hard financial condition. Our emotions, when properly manage and control, can give us the strength and courage to face any battle, including our financial battles. Moreover, they are also our tools that supply us inspirations and will-power to do what is right and what is excellent.

Prepare your people
We also need to prepare the people around us who have significant impacts in our lives. These persons may include our families, relatives, close friends and other people who can affect our financial lives. Your children for example, who need your financial support for their education, should be taught and be ready for the effects of the coming crisis. The importance of preparing the people around you for the coming financial storm is to make them people that can help you survive the disaster instead of letting them become additional burden that will add weight to the crisis.

Prepare your hands
Last but not the least, we need to prepare our hands. This means we need to prepare ourselves to do and execute all those planned actions we have prepared for the crisis. Since we may be losing money when crisis comes, we must assure that our hands can actively work and find money to cure the coming financial troubles. Although we have prepared mind, heart or people around us, if our own hands are not prepared, expect that failure will still come to us. Hence, let us set our hands in fire during the cold and rainy days.