Some financial habits that can help you deal with emergencies

Isn’t it bothersome that just when you are about to leave your home for a journey, there is no cab available to accept your booking? If it so happens, then in the end you not only reach your destination late but also go through the distress of looking for other options in the process. Life seldom goes as planned, so preparing for the worst is always advisable. Just as you may prefer to book a cab in advance for an important event, you must also have an emergency fund for any critical financial need that can crop up in the future. 

Here are some financial habits that can help us deal with the curveballs that life often throws our way.

1. Set meaningful and practical financial goals

The first step in financial planning is setting goals – retirement planning, buying a home, overseas travel, a wedding in the family, and more. No matter what your goals are, try to be as realistic as possible. For example, aiming to buy a house worth Rs 1 crore in ten years may not be practical for most of us. However, one can break this down by saving the down payment, taking a loan for the balance, and setting a reasonable timeline to do all of this. 

2. Create a budget and use it for guidance
 

Good financial habits like creating a budget can be great for your long-term financial security. A budget acts as a roadmap for the future by laying down the steps for better financial well-being. It helps you be disciplined with your savings and keep track of your expenses. With a clear budget, you are likely to stay within your goals. 

3. Pay off debt at the earliest

Debt can be harsh on your financial health. There is no harm in taking loans to fulfil your goals, but make sure you plan well and settle them in time. Be sensible with your debt and avoid taking too many loans at once. It is also essential to use credit cards wisely. Above all, pay your dues on time. Instead of looking at credit cards solely as a means to cover your expenses, use the rewards, cashback points, etc., to save money. 

4. Build an emergency fund

Dealing with emergency situations is much simpler if you have a standby fund. An emergency fund protects your savings/assets and ensures you do not deviate from your planned goals because of an unexpected crisis. Build your emergency fund using an appropriate Savings Account. For example, IDFC FIRST Bank's Savings Account helps your money grow faster due to the power of compounding. At the same time, you can easily access your money thanks to free and unlimited ATM withdrawals. 

5. Regularly review and update your financial plan

Events such as marriage, divorce, raising children, losing a loved one, a change of job, etc., can impact your finances. A periodic review of your financial plan, such as your budget, investments, savings rate, emergency fund, etc., can ensure that your personal financial planning always aligns with your changing needs and conditions. For instance, if you have children, you may need to save more than before. Getting an IDFC FIRST Bank Savings Account can help in this connection.  It offers attractive and competitive annual interest rates and monthly interest credits with the power of monthly compounding for better growth. 

Conclusion

Creating an emergency fund and following these tips can help protect your savings. These habits can also eliminate financial stress and allow you to live a more fulfilling life.

Additionally, make sure to use suitable financial instruments for your needs, such as IDFC FIRST Bank's Savings Account, to simplify matters and enjoy good monetary growth. 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.