Money is a scarce resource. It will never be enough or be stored up in treasure houses like other resources, like gold: everyone needs it every time. The trick, therefore, on how to make proper use of funds lies with how you table out your financial plan. You have to ensure that your financial plan covers your all year income as well as all year expenses with, of course, emergency money set aside.

Research confirms that finances are easy to handle in a regular financial year than in hard financial years, with a list of factors to put into consideration when faced with uncertain financial times, however, the two types of years can look like one.

1. Financial planning.

As obvious as it sounds, you can undergo financial challenges only because you didn’t plan your finances. There are three stages to safe and responsible planning of money: prioritization, assessment, and restraint. Under prioritization, you have to analyze and identify what maintains you a stable income. The three principles will help you put more effort into the specifics and stabilize the flow of money.

Under assessment, you can identify the various sources of getting money. There are multiple opportunities that you can seize to gain more money. Under restraint, you have to minimize the expenses and maximize the money. With that in mind, you can be sure to handle all your annual finances responsibly.

2. Cut on debts.

Debts tend to drag you financially backwards. Regardless of the financial situation you are in, be sure to spend less than what you earn. However, there’s an exception to the ‘general rule’. Unless it is an investment in an asset, then never spend more than what you earn because that will land you into depths of debts, that you might never manage to settle without risking what you acquired, and perhaps, your life.

3. Make proper use of credit cards.

Apart from credit card use in money transactions, they also an easier way of finding or tracking your expenditures. The history of the transactions made determines the latter. As much as credit cards help track spending, they, however, can be a bait to debts. To avoid falling into the traps and snares set, you have to have your account balance below 30% of the money in your account, ensure you pay your bills on time or make use of debit cards instead, and also track your credit score. With that in place, you can get access to financial help even in uncertain times.

4. Learn to balance your income and expenses.

Balancing between your income and expenses translates to having a budget. According to personal financial planning experts, you have to set aside 50% of your income on living, 30% on lifestyle and 20% on retirement and emergency funds. With that planning technique, you will be able to manage your funds regardless of the financial situation.

5. Save for emergencies.

As you remember to ‘treat yourself’, so should you remember to set aside funds for emergencies. In uncertain financial times, you might tend to ask for loans from banks that will land you in huge debts. Financial experts say that proper saving for emergencies has to be 3 to 6 months of your living essentials. That is approximately 20% of your annual income. Emergency funds come in handy when you have unplanned expenses: expenses you never expected. The emergencies can run from medical bills to car repairs or even house renovations. With emergency funds set aside, you won’t have trouble living or rather surviving.

6. Have insurances on your assets.

Whether it is a house or your means of transport, car or boat, getting insurances will help secure funds. For instance, when you have boat insurance, the insurance will help cater for any damages that occur to it, and that helps in cutting on expenses as well as the emergency funds. Having insurance on your assets also means that you value yourself and also your family. When you treasure your family, it keeps you in check on how you spend your money. You might even consider educating your family on the value of money, so they help you with the insurances and finances.

7. Save for retirement.

Though the future or after retirement life seems far, it always comes sooner than expected. You will have trouble living when you didn’t plan for your future. A piece of advice is that you begin to save as early as you can, so you gather enough funds to sustain you when you can no longer sustain yourself. Just like the emergency funds, you are to save 20% of your annual income for the future. Retirement funds have to be at least the value of money that can sustain your living for almost half a year.

With the steps put into consideration, you can overcome any financial situation that comes your way.