Are You Prepared for These Financial Emergencies?

It happens every day. And if it hasn’t happened to you yet, be sure that it will. Emergencies can’t be anticipated. That’s why they are emergencies. Sure, you can set funds aside for an emergency fund, but it’s impossible to prepare for emergencies of a certain magnitude. Sudden and/or prolonged medical emergencies, lawsuits, and lengthy loss of income can all be eventualities that quickly deplete even hefty emergency funds. If you find yourself in one of these or a similar situation, you need cash in your case, whatever that case may be. Here are the most common financial emergencies that affect people of all walks of life. By looking at likely emergencies, you have a much better chance of protecting yourself in case one of these pops up in your own life.

Marriage

While not an emergency per-se, this most joyous of events can bring with it many unforeseen financial difficulties. This is especially the case if one partner, but not the other, has significant debt. The best plan is to look these realities square in the face before you get hitched. Make a plan for how you will work together to eliminate this debt. Then stick to it, year-in and year-out, until the debt is gone. By working together, you’ll strengthen your marriage, as well as your credit score. This will help you avoid another money-pit: divorce.

Losing a Job

It can happen to anyone. Maybe it has already happened to you once or twice. If it has, remember how difficult it was. If it hasn’t happened yet, trust me, it’s no fun. Combat the stress and uncertainty of sudden unemployment by having a reserve fund set aside to cover up to 6 months of bills, food, and sundry expenses. This will be a huge load off your mind. Maybe you won’t even have to use it!

Acts of God

Natural disasters are tricky. It pays to know if your area is flood-prone, earthquake-prone, or tornado-prone. Have the appropriate owners or renters insurance at the ready. It pays to prepare for even unlikely events. If you stand even a small chance of having your home ruined by a hurricane, get the available insurance. It doesn’t cost a lot, and you will thank yourself profusely if you ever really need it. You can also avoid these things by living in a place that doesn’t suffer from many of these types of natural disasters in the first place.

Bankruptcy

This is a big one that can mess up your plans for many years to come. It happens to lots of people in different walks of life, from rich to poor. Prepare for this by trying to make sure it never happens. Use only about 30% of your available credit limits. Save and invest your money wisely. Don’t nickle and dime yourself into poverty by spending all your disposable income on disposable pastimes. If you encounter your first financial emergency with money ready to deal with it, you’ll be much better off in this regard.