The author, Jen Glantz. When I was laid off from my full-time job in 2015, I had no plan for the sudden loss of income.
Since then, I’ve become savvier with money and make active moves to protect myself from sudden loss.
Now I have an emergency fund, a set budget, and multiple streams of active and passive income.
Read more from Personal Finance Insider .
When I got laid off from my full-time job in 2015, I panicked. I had relied on the income from that job to pay my bills, and when I was let go without any advance notice or warning, I didn’t have any plan to replace the money I was making from that job.
Ultimately, I decided to become my own boss . I also resolved to become more financially savvy so I would never find myself in a situation where all of my income was erased in just a few minutes, which is what it felt like when my boss told me I no longer had a job.
Here are the five ways I plan my finances so that I can always be prepared for another sudden loss of income. Popular Articles
Best travel credit cards
Average stock market return
Best mortgage refinance lenders
Best cash-back credit cards
Today’s 30-year mortgage rates 1. I stick to a strict budget
Creating a budget was the first thing I did when I got laid off. It was important to track my spending to reach financial goals, and the only way I could do that was by carefully constructing rules and boundaries for how I used my money.
While it took me a few years to be firm about sticking to a budget , it’s allowed me to be smarter about how I spend my money and how much of it I save. That way, if a financial emergency happens, I can feel more in control of my personal cash flow and make any needed adjustments. 2. I created an emergency fund for myself
Before I got laid off, I didn’t have any emergency funds — let alone a robust savings account that I made an effort to contribute to monthly. I quickly realized how much I needed one when I got laid off from my job and had bills to pay with no clear strategy as to how to make up for the income I just lost.
I decided that as I built my career as an entrepreneur, I would build my emergency fund by putting money into that savings account every month.
Experts say that a person should generally have three to six months of expenses in an emergency fund. I always aim to have six months or more saved in my account since my income and projects as an entrepreneur can fluctuate. Citi Checking
Member FDIC
Earn up to $1,500 Cash Bonus. Open a new eligible checking account with required activities. Earn up to $1,500 Cash Bonus. Open a new eligible checking account with required activities. Citi Checking 0.50%APYOnline Savings Account No Minimum balance No Fees 24/7 Online Access Online Savings Account 1.00%APYMember FDIC60 Month CDThere’s no market risk or minimums—just guaranteed returns.60 Month CDSponsors of Advertiser Disclosure 3. I have multiple streams of income When I was working full-time at a startup, I only had time to work that job. So, the total amount of money I could make was my salary. Now that I work for myself, I have made it a point to find a variety of ways to bring in alternative streams of income. That way, if one of the ways I make money is on hold or it ends, I still have revenue coming in from other projects.For example, in addition to my business, I offer consulting and coaching, do freelance writing, and have a few side hustles that all bring in various amounts of income every month. Whenever one stream of income goes away, I spend that time figuring out something to replace it with. 4. I’ve built several streams of passive income After getting laid off, I had a friend tell me about the different passive streams of income he was making. That sparked my attention and I began my own adventure of finding ways to make passive income every month.I have between five and seven passive streams of income that vary from online courses, to e-books, to investing in small businesses, to keeping my cash in a high-yield savings account .A benefit […]
Protected by Patchstack