If you want to protect your lifestyle, you need to protect your income in times of crisis. There’s no telling when an accident might be happy at work – primarily if you work in an offshore industry – or when you will come down with a severe health condition. Here’s how to protect your income.
Saving Safety Net
When it comes to protecting your income, there are several ways to do it. Possibly, the most challenging is creating a saving safety net, but it also makes the most sense financially. The best advice is to have three to six months of savings to cover your basic expenses.
If you lose your job or can’t work due to illness or injury, you still need to pay your bills to keep a roof over your head and food on the table. If you don’t have a lump sum to pay into an investment account, start with small savings every month and build up a saving safety net.
The next best option to support yourself in the short term is income protection insurance. A saving safety net is better because the money belongs to you and can accrue interest while you work; conversely, income protection insurance requires you to pay a monthly premium.
It’s possible to take out individual income insurance for specific industries, such as Off Shore Accident insurance; this covers you for common causes of accidents and time off in the industry. Check with your employer first, as some companies have employer-provided income protection.
Critical Illness Cover
The most valuable thing in life is our health, so it’s worth protecting with the right insurance. As we get older, the chances of being affected by a severe illness or disease are higher, and so are the chances of running into money challenges because it’s not possible to go to work as usual.
Severe illnesses like heart disease, cancer, strokes, and other conditions can keep you out of work for more than six months. The last thing you want is money stress on top of the pressure of the illness. You can relax and focus on battling back to total health with critical illness cover.
If you struggle to put money aside every month for a saving safety net, that’s not surprising. The cost of living is high now, and it’s hard enough to cover basic expenses without saving. One solution is to start a side hustle and save money for income insurance.
There has never been a better time to start a side hustle. Many people are selling items on platforms like eBay and Etsy; these are also great places for artists to sell their work to an appreciative audience. Other ideas are AirBnBs, freelancing, or a print-on-demand business.
If a side hustle works for you, why not take it to the next level and create passive income streams that help you save for your income safety net without sacrificing any of your time? Some effective passive income streams include things like dividends and rental incomes.