Many people have developed a financial plan that will allow them to cover their monthly expenses and save for retirement. However, many of these plans may not cover those unexpected financial disasters that can put you into an emergency. Besides setting aside money into an emergency fund, there are often things that you can do to avoid common financial emergencies. Here are some of the top financial emergencies and what you can do about them.
If you lose your job without warning, it can be devastating to your income and your savings. Overcoming this obstacle may require you to have a savings fund to keep your household going during the interim between jobs. You can protect yourself from a long period of unemployment by staying in the loop in your industry; if you’ve already done some networking recently, then you may already have a contact who can get you your next interview. Keeping your skills up to date is another important part of protecting yourself against a lay-off; look for continuing education in your area.
Divorce can sometimes sneak up on you and cause not only the loss of your spouse’s income, but also loss of some of your assets in the divorce trial. The best way to protect yourself in this instance is to hire a good divorce lawyer that can get you the best settlement possible.
If you don’t have the proper medical insurance coverage, a medical emergency can be the source of a lot of financial stress. Fortunately, there are a few things that you can do in case of this kind of emergency. Short-term medical insurance may help you to get some coverage at the last minute. You may also want to consider a healthcare credit card; these will have lower interest rates on approved medical expenses. The bar for getting a medical credit card may also be lower in the case of a true medical emergency. Finally, you may need to speak with the health care provider directly to create a health care payment plan if you are in a financial crisis.
Property damage can be a major expense, and it can result from natural disasters and theft. Hopefully, you have a comprehensive home insurance plan to take care of most of the expenses. If you do need to pay for some repairs out of pocket, consider independent repair people who may be able to offer you lower rates for the work.
Finally, identity theft can be a great source of financial strain. Although you may be able to recover the money through your bank’s fraud policy, the temporary loss of cash flow may cause other financial errors with your monthly payments. You can try to work with your BB&T bank account on a temporary loan or raise your credit card limits temporarily to cover the losses.
The methods for dealing with each financial emergency may be different, but there are common tasks that can help you prepare for them. Setting aside money is one, and getting proper insurance coverage is another. Think about the risks that are most likely to happen to you and try to build safeguards into your life; this way, you can avoid some of these emergency financial situations.
Jessica Kane is a professional blogger who focuses on personal finance and other money matters. She currently writes for Checkworks.com, a leading supplier of personal and business checks.
Disclosure: This is a “sponsored post.” The person who sponsored it compensated me via a cash payment, gift, or something else of value to post it. Regardless, I only recommend products or services I use personally and believe will be good for my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”