We can’t afford to play it safe anymore when it comes to our money. That’s what Ms Rona taught us in 2020.
Having been in the money game for a minute, I’ve picked up some useful tips over the years. Not only do I try to utilise them myself, but I also advocate them to others. So, it is not unusual for me to answer the question of savings, like this…
“Your savings should consist of a 6-month emergency fund. Meaning that your general bills and overheads can be covered for a minimum of 6 months and the same applies to your business, if you’re a business owner”.
But as we sit in our third national lockdown (in the UK) with no clear sign as to when it will all end it’s fair to say that there has been no emergency fund, contingency plan or business continuity plan that could have foresaw the impact of an international health crisis and subsequent pandemic.
At the beginning of the first lockdown in March 2020, the average Brit had just under £7,000 in savings. Would that last you 6 months?
But the story was much worse for many, with one third of British adults having savings of less than £600 and one in ten of us, having no savings at all.
Nearly half of all British working adults don’t have enough saving to live for 1 month without their income. I truly feel it for all the people who saw their incomes disappear overnight and therefore experienced this first hand.
The reality is that we as a nation are rubbish at saving! Whether it’s because we are too stretched, lack discipline or just don’t like it. We are not doing enough of it.
And the result was over 4 ½ million payment holidays been granted across mortgages, credit cards and personal loans between March and October 2020: making the economy as fragile as our household finances.
Saving for a rainy day is one thing, saving for a rainy season is quite another, and realistically it’s not enough to save us from financial ruin.
So what is the answer? Well its multiple streams of income.
No longer is the strategy reserved for millionaires; devising different ways to make money is critical to our financial futures and my personal focus for 2021.
Now is the time to start investing, get the side hustle or passion project going, or even consider an additional job (particularly if you are keen to keep yourself busy during this never ending lockdown).
Additional incomes don’t have to be complicated and you don’t need to be the Wolf of Wall Street. It can simply be a case of doing some research in your chosen areas of interest to work out how to monetise the stuff you’re interested in or good at, and then getting it going.
I’ll share some of my plans for additional revenue streams moving forward which starts with turning my years of financial knowledge and experience into saleable resources designed to help everyone who wants to achieve financial freedom get savvier with their money.
So, what are you going to work on this year to increase your streams of income?
Sources: ONS & Gov.UK