Financial emergency often strikes when we least expect it. Getting laid off from work, being sick, sudden increase in prices, unprofitable business – these are all common problems that can affect all of us. This is why it’s best to always be prepared for difficult times.
Below are 5 practical ways on how you can be prepared during a financial emergency:
1. Save up for small emergencies.
Do you set aside a personal fund for when small emergencies arise? Set aside a few dollars every day and you’ll be surprised at how much you can save after a few months. You can use this fund when unexpected purchases such as medicine or extra groceries are needed.
Open a savings account.
Do you have your personal savings account? If you haven’t opened a savings account, it’s about time to open one. Every month, set aside a portion of your salary and put it into your savings account. This way, you can save enough money to use when you find yourself in financial crisis.
Keep up with your debts.
Aside from saving up, be sure that you are keeping up with all your repayment schedules. This is a crucial step not only to avoid debt build-up but to protect your personal credit history as well. If there are instances when you feel that can’t submit your payment on time, call your creditor right away and request for arrangements.
Contribute to your retirement plan.
Do you regularly put in savings for your retirement plan or 401k fund? If you are working for an employer, make sure that your employer is contributing his/her share to your retirement fund. Take this opportunity to save while you are still earning money.
Get a personal insurance.
Personal and family insurance policies are a great help during emergencies. Hospital bills and medicine bills can quickly put anyone in debt if there is no insurance coverage available.
Considering the above steps on how to prepare financially can save you from stress and trouble. You don’t need to wait until problems arise before taking action. Sadly, some people who are in need of financial support often resort to pay day loans or quick loans which have very high interest rates and fees. This can be avoided if you have funds and resources you can turn to.
