All of us have faced an unforeseen situation at least once, when we urgently need a certain amount of money to solve a particular problem. In everyday life, this can be equipment failure, sudden loss of job, health problems, and other events. We can cope with such situations relatively easily if we have one good habit called saving.
If saving money were easy, the whole world wouldn't be talking about it so much. The fact is, just a high and stable income is not enough. We need to have a strong will to be able to save a reserve amount at an intensity that is acceptable to us, which can become a guarantee of a peaceful future. We should think about making reserves even when things are going well and nothing seems to threaten our income, otherwise we may be too late and find ourselves in an impossible situation. How many examples of this have you seen? How many times have you heard in the circle of acquaintances and friends – I had no choice but to take out a loan? Credit, additional financial obligations, even increased expenses in a critical situation are not a desirable scenario for anyone.
Especially during the pandemic, we all realized how unpredictable the future can be, how many unforeseen things can happen, and unfortunately, including many unpleasant facts. If we want to live with a sense of security and not lose our sense of stability, if saving money has been foreign to us until now, maybe we should think about it now and take the first step. If we think that saving money will help us achieve our goals, it will be easier for us to take this step. The main thing is to start and take the first step!
Just like for individuals, a lack of savings can be disastrous for businesses. Any company can find itself in an unforeseen situation, from which it is possible to get out of it without financial losses only with the help of reserve funds. It is crucial to think about this during the startup period and gradually create a reserve fund that will prevent the company from facing liquidity problems, which in many cases cost the business a lot (sometimes even bankruptcy).
Just as any person with an income can make savings in everyday life, it does not matter in business whether we are talking about a large holding or a micro business, the same principle applies here - the amount of turnover is not decisive. The main thing is to understand that we must be prepared for a “rainy day”, that we must also consider unforeseen cases in the long term and start saving in a timely manner, even if it is very small. We must remember that the reserve is equally vital for a business of any size.
To do this, first of all you need to:
- Control our income and expenses
- Distinguish between fixed and variable costs
- Let's optimize costs.
- Determine how much and at what intensity we can save.
- Let's decide where/in what form to store our savings so that they are available when needed.
If we don't want to put our company at risk of disappearing from the market without our knowledge, if we want a stable financial future, we must recognize the importance of reserves and learn to make savings with any budget.
We must remember – these savings:
- Must cover at least 3 months of fixed expenses
- Must be liquid at all times
- It should not be spent unnecessarily (intended only for unforeseen circumstances).
