Accidents can be related to financial activities. Financial accident most people experience is when the income is not considered enough to cover expenses. Always feel less even if you want to reduce consumption, income derived is still able to pay to live. Tragically, the inability of restraint resulted in consumer move on to financing is done by credit card. As a result, a larger expenditure than income. This was the beginning of the financial crash will continue with other accidents.

Concrete example, the use of credit cards will increase, while income is relatively fixed. What happens then is no longer the action lid dig a hole, but caught in the debt hole deeper and deeper. Life was becoming stagnant.

People always pursued debt collectors or prolonged stress because there are many unfulfilled desires. It is not possible, because the more complex problems, our work can be lost.

That is just an accident caused by the inability of the financial “hit the brakes” consumption. Anything else other financial crash that also hit millions of people, namely the inability to provide funds for paying school fees. Funds for school children who are not prepared to lead the child not in school.

Even in school, eventually the child can only be in school the less qualified. Or actually, funding for school children is available, but because it affected the environment, children forced into a super-expensive schools. In order to maintain prestige, parents borrowed money to finance children’s schooling.

Financial accident is not only experienced people of productive age. No less an accident that hit among those who should have been established in the age. An employee who has given the facility used by companies, such as vehicles and home offices, often forget to buy their own homes.

When he reached retirement age, he will have a big problem because they do not have a home or vehicle. For, throughout his career, he was accustomed to using company facilities. Retirement should be enjoyed instead forced to keep working to get money to buy houses and vehicles.

Moves

What will we do to the financial crash is not up to you?

First, do not ever owe if the aim is only to finance consumer lust. Debt is only worth doing for productive activities that can provide income. Consumer debt for things like mortgages and car loans, may be considered if the payments are still being met from the monthly income.

The use of credit cards even if not for the debt, but only for the convenience of payment transactions. So, not because they do not have the money, but more because of the sheer practicality.

Second, make investments and protection simultaneously. Many people assume that when you invest, the issue is completed. In fact it is not like that. In investing, many possible financial accident.

That’s because there’s a “do not put the investment in one basket”. The principle is simple, if all your investments in stocks, for example, when the stock market crash, it is not possible all your investments will evaporate.

Therefore, investments must be protected. How? Spread the word investment in various types, ranging from low-risk, medium, and high. In this way, your investment is already protected. Concretely, if your investments are at increased risk of problems, you still have a “reserve” investment in low-risk types.

It is in the context of investment protection. Beyond that, protection to prevent the negative impact of the financial crash could also be done by purchasing insurance products. As the example above, people often experience problems in meeting the cost of children.

Well, one easy way to avoid accidents associated with the financial cost of child’s school is to buy an insurance policy education. In addition, various other insurance products, including health insurance, accident insurance, and insurance of death, a “style” to overcome the financial risk of accidents.

Actually quite a lot of ways to avoid financial accidents. Like when driving a motor vehicle, before driving, of course should be checked whether everything was still functioning properly. So is the financial activities. Before performing a variety of actions, of course, to think about risk and the possibility of a financial accident.

By : Elvyn G Masassya, Financial Practitioners