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Financial disaster avoided with planning
Some tips to help you weather financial emergencies
While you hope that it will never happen, you should always be prepared for the possibility that a financial emergency or disaster will strike. They are often unavoidable, but some careful planning can make them easier to survive. Below are some tips to help you prepare for that day you hope will not come.
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Financial emergencies can come at any time; be ready
The last thing anyone wants is to have an unexpected emergency pop up. It’s hard enough for most people to survive in today’s society with mortgages, car payments and high gasoline prices without having to deal with the financial setbacks that come with job loss, sudden illness or natural disaster. But those things do happen, and they usually come when people are in the least capable position to do something about it. While these sorts of catastrophic problems are usually unavoidable, they can be a bit easier to stomach if you do a bit of planning ahead of time.
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Here are some tips that may help you plan to get through a financial disaster:
- Sign up for direct deposit and online bill paying. Having online access to your bank accounts can be useful if you cannot physically get to your financial institution. With direct deposit, you will know that your paycheck will go into your bank account if you can’t get there due to illness or natural disaster. Automatic bill paying, even if you just set it up to pay minimum amounts, can help you in times when writing a check and mailing it may not be possible.
- Have an ATM card whether you think you need one or not - Having a card for an automatic teller machine will allow you to have access to cash in the event of an emergency. You never know when you may need to get some cash in a pinch; the last thing you want is for it to be necessary to get to a bank that isn’t open. Get a card, and put it in a safe place. You’ll be ready.
- Do some preparatory borrowing - A home equity line of credit isn’t so much a loan as it is the ability to borrow money later. You can apply now and know that the money will be available to you at a later date if you need it. If not, no harm. You don’t have to make payments on money you haven’t actually borrowed. A home equity line of credit may be the best way to have thousands of dollars at your disposal for that rainy day.
- Put some cash away for an emergency - Experts recommend that you put away three months’ worth of expenses into a savings account. Difficult? Sure. But you never know when something might happen that will make that money absolutely vital. Give up HBO or Starbucks for a little while and you might be able to save more than you realize.
- Keep a lockbox - A fireproof box that contains financial information, such as credit card numbers, passports and bank and insurance account numbers would be a good thing to have. Make sure it’s portable; you want to take it with you in an emergency. Original copies of valuable documents should be kept in a safe deposit box.
These steps can go a long way towards protecting you when some emergency strikes. You never know when, or if, it will happen, so the sooner you start preparing, the better protected you will be.
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