Four steps to help you protect your income
Many of us don’t hesitate to insure physical assets such as our home, contents and vehicles, but what about our greatest asset of all – our ability to earn an income?
While we’d all like to picture a smooth road ahead, sometimes that’s just not the case. Protecting your income along the way isn’t a luxury: anyone with financial obligations could consider their back-up plan should job loss, business closure, sickness or injury, strike.
Because of this, planning ahead for the unexpected may be something to think about for your and your family’s financial security. Read on for some tips on protecting your income.
1. Save for a rainy day
Saving is a potential way to insure yourself against setbacks, such as losing your income or unforeseen emergencies. This may be a good back up for short-term or relatively minor setbacks and, the best part is, it’s flexible. Get into the habit of saving on a monthly basis; you could keep these funds in an easily accessible savings or cash account with the best interest rate you can find, so you can access your money if needs be.
2. Consider Income Protection insurance
Income Protection insurance is designed to replace a percentage of your monthly income if you’re unable to work for a period of time due to sickness or injury. This may cover your day-to-day living expenses, giving you the financial peace of mind to focus on what’s more important: your recovery.
One thing to consider is the level of income protection cover you may already have through your employer or your super. If your employer or your super fund offers some form of income protection cover, you may still need to apply for additional income protection insurance or another type of insurance cover, so that in the unfortunate event of sickness or injury, you can protect your financial position.
3. Invest in yourself
Building up your skills could be a form of insurance. Developing more expertise and updating your skills in your chosen field makes you arguably a more valuable candidate, in case you need to find a new job due to redundancy. Even if you don’t lose your job or get sick or injured, broadening your skills can give you more career options down the track, whether or not you choose to remain with your current employer.
4. Find ways to boost your earnings
Finding ways to increase your regular earnings may improve your current financial situation and make it easier to save. By doing so, you could be providing financial protection against loss of income or unforeseen emergencies. Sometimes it even lets you follow your passion as a secondary source of income. Some people make extra money by taking up part-time employment such as a part-time tutor or coach, while others create and sell arts or crafts at local markets or online. With all the opportunities out there, there’s bound to be something to suit you.
This article has been prepared by BT Financial Group, a division of Westpac Banking Corporation ABN 33 007 457 14, AFSL and Australian Credit Licence 233714, and the information is current as at 20 February 2019. This article provides an overview only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information has been prepared without taking account of your objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it.