How to Prepare for the Unexpected

There are many things in your life that you know are coming. You are taking a vacation next summer so you start saving. You look into travel, accommodations, and what you want to do while you are there. Or, you and your significant other want to get married, so you start planning a wedding. While there are many things in life that you expect, there are unexpected things that can pop up as well. Even the most careful planners can be taken by surprise by something they were not planning for or expecting to happen. These events can have a significant impact on your financial future. Preparing for the unexpected can help to reduce the financial shock and help to keep you on track during trying times.

photo/Steve Buissinne via pixabay

Start an Emergency Fund

If you don’t already have an emergency fund, there’s no better time to start one than now. If you do have one, when was the last time that you contributed to it? The general rule for an emergency fund is to have six months of your income saved up. If you have a family to take care of, you may want to save more. Having this amount of money stashed away will help provide you and your family some security while you recover from an unexpected event such as job loss or an illness.

Have a Back Up Budget

If an unexpected event causes a sudden decrease in your income, it might be a good idea to have a backup budget in place. This budget can help you to cut back on expenses so that you are better able to survive the event. Make a plan on what you can cut back on, such as cable and cell phone, so that you are more easily able to implement your plan should an emergency arise. In the early stages of an unexpected event, you may not be thinking clearly, or you may be emotional, and a plan will help you to stay on track.

Preparing for Natural Disasters

Natural disasters, whether a tornado, a hurricane, an earthquake, or even a massive snowstorm, can be devastating. They can leave you without power for days. You may be stuck in your home, unable to go anywhere. Some natural disasters may even call for an evacuation. It is important that you have an emergency kit ready to go in the event of a natural disaster. It should include a five-day supply of food and water for each of your family members, as well as a medical kit. Having an emergency kit ready to go can make getting through a difficult time just a little bit easier.

Create a Will

No one really likes to think about death, but it is important to be prepared. Even if you are perfectly healthy, accidents can happen. If you are supporting a family, it is essential that you take action now to ensure that they are cared for. You can enlist the help of a lawyer to help you draw up your will and it can be revised as needed as you get older. Follow this checklist for a good starting point.

Get the Coverage You Need

Having insurance coverage is a must. You may know some of the types of coverage that you need, such as car insurance, homeowner’s or renter’s insurance, and medical insurance. There are other types of insurance that you should consider as well in order to prepare for the unexpected.

One type of insurance that you should have, especially if you have a family, is life insurance. There are a few different types of life insurance, including term and whole life. Life insurance is there to provide support for your family for a time after your passing.

Another type of insurance you should consider is funeral insurance. Funeral insurance is also sometimes called burial insurance or final expense insurance. This type of insurance is used to pay for the cost of your funeral service. You can also tailor it to cover the cost of any outstanding bills that you may leave behind, including medical bills, legal fees, or other debts.

While you plan for many things in your life, there are still events that can occur that take you completely by surprise. The best thing you can do in these situations is to prepare for them, helping to protect your future as well as the future of your family.

Author: Colin Brice