Life is more rewarding if you aren’t just sitting on the sidelines. But how can you make sure you have the financial flexibility to take advantage of the opportunities that come your way or handle the unexpected? Depending on your needs and goals, there are several different ways you can build flexibility into your budget.
Establish an emergency fund.
Borrow what you need.
Give yourself access to credit.
How to Have the Money You Need When You Need It
One of the best ways to add flexibility to your budget is by setting up savings accounts for that purpose. It’s a smart idea to have both an emergency fund that you don’t touch unless you have to and a rainy day fund that allows you to be a little more spontaneous.
Loans are a good way to borrow what you need for a specific expense or purchase. If you don’t have something specific in mind but want to know the money is there if you need it, you might want to consider a line of credit like a home equity line of credit or a credit card. With these types of loans you can borrow, pay it back and borrow again – and you only pay interest on what you owe.