How to handle a financial crisis and turn setbacks into setups

This week on Money and Investing, Mitch Olarenshaw and I discuss how to handle a financial crisis, sharing practical strategies to stay prepared and resilient.

1. Build an Emergency Fund

The first step is creating a financial buffer. Start with one month of living expenses, then build toward three months. This ensures you can manage essentials if income stops.

2. Review Your Budget

Track where your money goes and cut unnecessary expenses. Having a clear budget helps reduce cash burn during tough times and keeps your finances under control.

3. Protect Yourself with Insurance

Consider income protection or total permanent disability cover, especially if your work involves physical risk. These safeguards must be in place before a crisis occurs.

4. Negotiate with Banks and Creditors

If money is tight, speak with your lender about options like payment holidays or reduced repayments. The same applies to tax obligations—proactive communication often leads to support.

5. Strengthen Relationships

Divorce or separation can devastate finances. Investing time and effort into keeping relationships healthy can protect shared assets and prevent unnecessary losses.

6. Adapt Your Work Approach

If you lose a job in a financial crisis, focus on re-employment quickly, even if it’s not your ideal role. Bridging income matters more than ego, and employers value resilience and responsibility.

7. Create a Side Income

A secondary income stream—whether a side hustle, small business, or skill monetisation—provides an extra safety net. It’s not a luxury, it’s a necessity in today’s uncertain world.

For more Info about Money and Investing, you can go to the podcast; The Wealth Playbook: Your Ultimate Guide to Financial Security; and The Wealth Playbook by Andrew Baxter – Audiobook, which is on Audible.

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The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.