There are many situations that can arise that financially knock us off our feet. In the event of an accident or an illness, how will you deal with the financial fallout?
There are several considerations to make well before this ever happens to you. This way, if you do end up falling prey to accident, injury or illness, you will still be able to take care of yourself financially.
Create a Rainy Day Fund
Rainy day funds are not actually for rainy days but rather to provide you with emergency money in the future. These are more commonly known as emergency funds. Try to save up at least six months worth of monthly normal expenses especially if you’re a bread winner so that you can take care of yourself in the event that you cannot work.
Have an Emergency Backup Plan
Who will you turn to if you run out of money during times of need? Do you have an emergency credit card, savings, real estate or something else you can use to offset this difficulty? Do you have immediate relatives where you can ask for help? It’s important to establish a practical and reliable emergency backup plan to contend with in the event of unexpected situations.
Have a Plan for the Types of Inevitabilities that Can Occur
If you are in a car accident, how will you deal with the repairs and the medical bills? Familiarize yourself with a car accident attorney website or several that you can turn to for guidance and information if this happens to you.
If you become sick or injured, do you know which hospital you will visit? Do you have a life insurance to cover accidents and terminal illnesses? Do you know what your health insurance does and does not cover? Also, make sure that you have adequate vehicle insurance coverage for these types of occurrences.
Keep your Bills Paid Down
If you suddenly cannot work due to injury or illness, trying to pay off high bills can be really difficult. If you make an effort to keep your bills low at all times, then you will be better able to weather the storm if this does end up happening to you. This is especially true for credit cards, loans and other bills that charge interest.
Keep Everything in Writing
Commit your plan to paper. This way, if anything does end up happening, you can refer to your plan rather than panicking. It is important to avoid panicking during a time like this. You have more important things to attend to.
These tips are just a start. They will help you plan ahead of time so that you are financially capable of surviving the unexpected. You cannot predict what is going to happen to you in the future, but you can do everything in your power to lessen the blow by planning ahead of time.
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It is really important to set aside extra money for unexpected expenses.
i like the “rainy day fund” name, keep it up tyrone!
It’s Father’s Day today in the UK, and my Dad always said to me growing up: “always expect the unexpected” I thought it was a contradiction, didn’t make sense at the time. Now that I think a lot about money and how to survive those pitfalls it’s beginning to make sense!
I made my “rainy day fund” up to 10-months expenses…just got married a couple of months back…and who knows i might be a father one day, I have to save up extra for that. Thanks!
Brilliant tips to say the least. I have just entered into the work field and have already opened 2 mutual funds for extra savings. I manage a well planned budget every month, hence somehow things become easier for me to keep a certain amount aside from my pay check for the purpose of savings. I also manage not to keep any due payments in order to avoid debt burden. Thanks a lot for sharing such an informative content.
Andrea Jones
Having a rainy day fund is key, but also backing it up with insurance is very important. There is only so much rain that a rainy day fund can handle at one time. My family has just come through a house burning down and a car being written off and having money liquid and the appropriate insurance made all the difference.
Having a backup funds are a must these days. Personally, it helped me get through a rough time at one point in my life. I’ll follow some other tips as well! Thanks for sharing!