There are many different ways to go about weaving a financial safety net, which simply refers to actively building up some amount of money you can access should some kind of financial emergency befall you. The best way is of course to make all that money and put it away in some kind of investment which will allow you to cash it out immediately as a lump-sum should the need arise, but that’s not a luxury afforded to the average person.
However, even if you are not exceedingly wealthy, you are still capable of weaving a financial safety net, with financial services such as insurance coverage. These services offer a more realistic possibility of achieving a safety net, and is within reach of the average person. No matter how you weave your financial safety net, the important thing is that you do it! Below are some of the common reasons and ways you should build a financial safety net.
Diminishing ability to work long and hard
As we grow older, day by day, our ability to work as hard as we have in the past diminishes. Saving early while you are able to work harder or longer hours can give you a financial safety net to rely on later, when you can no longer work the same kinds of jobs or need to reduce the amount of hours worked.
Responsibilities pile up
After you’ve hit the age of around 22 or 23, you will realize that it is nearly impossible to continue pulling regular caffeine-fuelled all-nighters like you used to. Responsibilities pile up, and sap all of your energy, as you work to cover whatever financial bills come up.
Your current salary is not enough
A simple consideration of a scenario where you have lost your job or your primary earning channel will bring to light that relying on your salary alone is probably not the wisest idea. This is why a growing financial safety net is required to sustain you should the worst happen, like if you were to lose your job.
You’ll enjoy peace of mind, at best
At best, having a financial safety net to fall back on should something major happen to disrupt your life will afford you peace of mind. At worst, it’ll allow you to at least keep your head and keep going as far as what’s required for your continued survival. Imagine the impact something like being accused of a violent crime would otherwise have on your personal and professional life if you have to be constantly worried about not being able to pay for the right legal representation to help you through this setback! Whether it’s false accusations, a loss of job, or major property damage, a financial safety net will help you through it.