Financial Cushion

Do you need a financial reserve

Regardless of what point you are in your life right now, whether you’re a new graduate who just scored his first job or a retiree enjoying her grandkids, having a financial cushion provides a breathing room when the expected falls on you.

You might not like your new job and decide to look for another. How will you live for the moments when there’s no income coming in? What would you do if bills upon bills come pouring, your car needs to be repaired while your sick mothers calls for help with regards her medications? You just don’t know when life will strike you with a curve ball, but you know it will happen.

Ideally, you should have some liquid assets that you can easily pull out when things go out of hand. Unfortunately, a lot of people are still living paycheck-to-paycheck and they believe there’s no room for that so called cushion for now. While those who have decent earnings just splurge their money away and rely on credit cards in case of an emergency.

But you should know you don’t have to live that kind of life. With loans with poor credit, you don’t always have to fear when life surprises you. Consider loans with poor credit as an extension of your savings that you can tap anytime. You lose your job, need to have the tire replaced and pay the electric bill, just get loans with poor credit you should be over with these financial stressors for the mean time.

However, it is so important to remember that loans with poor credit aren’t free nor are their effects permanent. If you have a financial attitude problem, loans with poor credit will only help treat the symptoms, not the root causes.
Sure, loans with poor credit will help cover your credit card bills for the meantime, but if you still tend to over-shop and over-spend despite this recurring problem, then it is the attitude that needs immediate fixing. Also, it is going to be more of a challenge in building your personal financial cushion if bad financial habits keep eating most of what you earn.

Another thing that you need to keep in mind with regards to financial cushion is that they are not your spending money. You don’t use them to buy Starbucks latte or movie tickets. Whether you’re using loans with poor credit or your own emergency fund or both as financial cushions, you should be extremely picky of when you use them. Certainly, coffee and tickets shouldn’t even make it to that category.

You can use loans with poor credit as financial cushion for when you direly need money. You shouldn’t be considering loans with poor credit to pay for a weekend of gambling in Las Vegas. Given the loans’ hefty interest charges, your reasons for taking them should be reasonable and justifiable in a financial sense.

A financial blow without a cushion can significantly cripple your finances. If you don’t have a cushion right now, you should already begin building it up. Follow the popular finance mantra of paying yourself first. Take a certain percentage from each of your paycheck and use that to build your financial cushion. Once you’ve reached a comfortable amount, you can begin paying off debts aggressively, paying and investing. Anything can happen as you try to reach your financial milestones, but knowing a cushion is all set up will help you go about them with more confidence.