Planning for Financial Emergencies

Perhaps we should always expect the unexpected, but it’s pretty impossible to do that in reality. After all, there are so many things that can go wrong and an infinite amount of time for them to do so!  That doesn’t, however, mean that we can’t repair for them, especially if we’re talking about financial emergencies.

If you want to ensure you’re always ready for a financial emergency when it rears its head, here’s what you need to do:

Build an Emergency Fund

Yes, it’s well-worn advice, but that’s because it really is sensible to set up your own emergency fund that can be dipped into when the unexpected happens. Ideally, you should start to save at least $1000, as that will cover most minor financial setbacks, However, if you have cash to spare at the end of the month, instead of blowing it all on non-essentials, divert some of it to your savings fund and you’ll soon have a sizeable nest egg to see you through even the most testing of circumstances like job loses, sick pets and family illnesses.

Plan for Those Semi-Regular Outgoings

If you know that your car needs to be serviced every six months and your dog has to see the vet every three months, plan for these expenses in advance, instead of waiting until the last minute and then having to scramble around to find the cash. The easiest way to keep track of these expenses is by drawing up a budget or schedule and then putting away a small amount each month to cover these costs. This should be separate from your emergency fund, which is reserved for emergencies and not semi-regular expenses.

Look at Loan Options

If you’re doing the other stuff on this list, then it’s unlikely you’ll need a loan, but if you ever do get hit with a huge medical bill or something similar, it is never a bad idea to know what small personal loan options that don’t require credit check are available to you. If you have the details of a good loan company, who is likely to accept your application, to hand, you’ll be able to deal with any emergencies, calmly, coolly and quickly.

Audit Your Insurance

If you have insurance (and you should have insurance for the basics including healthcare, your home, and your car) you should be performing regular insurance audits, so that you know you always have the right amount of coverage, and that your insurance will cover you in your current circumstances. This will help to prevent any nasty shocks where you think your insurance has your back, but it really doesn’t.

Make the Cut

Planning ahead is the only way you’re going to deal with an unexpected financial emergency and one of the best ways to get the jump on the situation is by going through your budget with a fine-tooth comb and identifying any superfluous expenses. You don’t have to cut them out now unless you want to, but if you know how you can spend less when you need a bit of extra cash, you’ll be able to spring into action and sort out that emergency in record time.

How do you plan for financial emergencies?