5 Financial Emergencies Everyone Must Be Prepared For
Are you prepared for financial emergencies?
Everyone wishes to have a financially secure future by way of hard work, planning and managing their finances wisely. Financial security and planning can help us achieve the life goals we have set for ourselves such as purchasing a vehicle, a house, funding your children’s education and marriage, saving up for your own retirement, and so on.
However, all these are expenses which one plans for. There are also many expenses which arise suddenly out of nowhere, and one may often find themselves ill-prepared to deal with them.
The delicate nature of life lies in the unforeseen. One is lucky if they don’t have to deal with an unforeseen event, but as a matter of fact, we all have to. These unforeseen expenses can range from very insignificant such as losing your shoes or a pair of glasses, to slightly more expensive such as losing your phone or your laptop going kaput.
Slightly costlier expenses would include repairs to a vehicle which has met with a minor accident, having to pay for a flight ticket to go home due to a family emergency. The costliest expenses in today’s times would surely be medical expenses, which we often prepare for.
However, when the unforeseen strikes, one can only be prepared to tackle it. To better prepare for an unpredictable event, one must compare between the possibilities of a certain event taking place, against the actual prep that is required for it.
In this piece, we list down some possibilities and events which one is likely to face during their life and how they can equip themselves better in order to deal with them.
Sudden Medical Expenses
How often have you heard someone say that they have not taken a health insurance policy at the moment because they have just got their medical tests done and everything is as it should be? There are countless people who continue to be ignorant to the importance of a health insurance policy, often giving reasons that they ‘don’t feel the need for it at the moment’ or ‘are healthy and don’t see the need for taking one yet’.
What they conveniently forget is that accidents and medical situations can happen unexpectedly, and they bring with them massive financial burdens. With the sky-rocketing cost of health care, it takes nearly no time for medical expenses to add up and before you know it, you are in serious debt just because you have no health insurance to cover you. What you can do to prepare for a sudden medical emergency is ensure that you have a health insurance cover for an adequate amount, which can help take care of expected and unexpected medical expenses.
What you can do to prepare for a sudden medical emergency is ensure that you have a health insurance cover for an adequate amount which can help take care of expected and unexpected medical expenses.
See Also: What To Look For In A Good Health Insurance Plan
You may be working for a well-known multinational organization or a very promising start-up company which offers you the moon and the stars, but job security shall continue to remain a myth at every point. Especially in the private sector, people are well aware of the fact that they might just lose their job any day. If you have a feeling that your current position in the company may be at risk and there is a chance that you may lose your job, you must immediately begin to prepare yourself not just financially but also mentally for it, so that you are well-equipped to survive till you can find another job. To tackle this unfortunate situation, you can begin by planning and
If you have a feeling that your current position in the company may be at risk and there is a chance that you may lose your job, you must immediately begin to prepare yourself not just financially but also mentally for it so that you are well-equipped to survive till you can find another job. To tackle this unfortunate situation, you can begin by planning and
To tackle this unfortunate situation, you can begin by planning and calculating the amount of money which you will require to cover basic costs such as rent, food, and basic utilities. Put some amount away regularly in an emergency fund to help you tide over the period when you are without a job. Three to six months’ worth of emergency funds is recommended.
See Also: 7 Steps On How to Figure Out Your Career
Unsuccessful Investment Decisions
Investments are something that may not be everyone’s cup of tea. Not all of us are investment experts which is why we take help from those who are involved in the field.
However, bad investment decisions are not just limited to individuals who are not quite familiar with the field. They can also happen to the most knowledgeable of experts.
People often invest with the objective of capital appreciation but this does not always go as planned and may lead to one losing their invested money. For instance, when investing in real estate, it isn’t always wise to depend on future growth as a sudden change or hindrance in the project can halt the construction and affect your investment negatively.
When planning to make an investment, make sure you do a thorough research on the type of investment which you would like to go for so that you are fully aware of the level of risk you are getting into.
This is a predictable expense which one can prepare sufficiently for. Expenses such as funding your children’s education, starting them off on their careers, funding their wedding, saving up for your own retirement, and saving up to support your own aging parents are just some of the responsibilities which one usually has to shoulder.
At such times, it is better to have resources which will help you fulfill those responsibilities adequately. To achieve that, one can invest and save in instruments which are designed to provide financial protection at certain stages of your life. These include insurance plans, savings products, retirement savings plans, disability insurance, and so on.
With climate change, the frequency of natural disasters taking place has increased and is expected to go up. Natural disasters are nature’s way of reminding us that there is little that we have control over when it comes to nature.
Earthquakes, hurricanes, landslides, floods are just a few of the many naturally occurring calamities which have the power to cause widespread destruction. Such destruction results in massive loss of life and property which can take years to rebuild.
To protect yourself and your house against any natural calamity, make sure you insure yourself and your house under a life insurance and a home insurance policy. Also, ensure that you take an adequate amount of cover for both policies which will help you manage any medical and repair costs if a calamity were to take place and cause damage.
Emergencies can occur at any time in our life, and often we may find ourselves unable to have much or any control over them. Medical or incidental emergencies are bound to lead to different kinds of expenses which one must be prepared to bear. It is not entirely possible for an individual to prepare for all kinds of unforeseen expenses in advance, but, it is always advisable to have a financial cushion which can help soften the blow dealt by unforeseen events and expenses.
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Author: Sanjit Agarwal
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