How Long Could You Live Without Your Salary?
Here’s a scary thought for you. I remember reading a few years ago that most Brits would only have enough money to last a few months if they lost their salary.
I just did some research and the most recent article I could find on the subject said that most of us have only enough put away to survive 3 months. 3 months. Isn’t that shocking? We work for year after year and if we were to lose our job we could be penniless in next to no time.
So how can we avoid this happening?
Save More Money
It seems that we are all saving less money than ever before. This is bad news for the future on many different levels. It is easy to think that we only save money for things like our pension fund but things can happen along the way which force us to use that cash for something else. Really, when you are saving money you don’t know what you will end up using it for. It might be that it sits in your account for years before you use it for something pleasurable. On the other hand, you might face a financial crisis and need it to bail yourself out of problems. The simple equation here is that the more money to save now the longer you can survive without a salary if you ever have to in the future. With lots of people losing their jobs due to the financial crisis in recent years this should be the incentive you need to start saving more for a rainy day.
Have an Extra Income Stream
Of course, losing your salary wouldn’t be such a big deal if you had an extra income stream, would it? It is becoming increasingly popular for Brits to try and make money over the internet, for example. This is a great way to ensure that you have an additional income stream but it can take up a lot more of your time than you might think. You might think that ideally this second source of income will replace your main job but don’t forget that this might dry up at some point as well. The longer you can juggle both jobs then the better you will be able to cope if one of them ever disappears. You could also consider the idea of taking a more traditional type of employment for this second income stream. Working two jobs isn’t something which is immediately very appealing to most of us but if you can get into the swing of thing then it can turn out to be a great way to keep your finances in order even if you lost your main job.
Take Out Insurance
Another idea is to take a form of insurance which covers you in the case of your salary disappearing. This can be something like the infamous mortgage protection or loan protection cover. This type of insurance has got a really bad reputation in the past for being mis-sold but that doesn’t make it a bad product. As long as you know what it does or doesn’t cover then if can be really useful in paying your loans while you look for a new job. Basically, it will pay off the loans you cover with it if you lose your income for a certain period of time. Other policies are called things like income protection insurance and will pay you a percentage of your normal income if you are sick or have an accident. You might take out one of them policies and never use it but it could turn out to be a life-saver in other circumstances.
How long could you survive if you lost your salary?