There is nothing for certain in this world apart from taxes and death. Financial and medical emergency can come into our lives at any point of time. So, it will be better if we remain prepared for the unexpected financial expenses and avoid the stress that it brings with itself. You have to be careful and responsible enough in order to save yourself from a financial crisis.
How should you prepare for unexpected financial expenses?
Here are few ways which will help you in preparing yourself from any unexpected financial crisis. Let’s take a look:
(1) Create an emergency fund
In order to save yourself from any kind of emergency – financial or medical, the most important thing that you need to do is to create an emergency fund. This is an absolute importance for all of us. You should make sure that you have at least 8-9 months of your monthly income saved in your emergency fund. This fund should be completely separate from your other savings or checking account. You should make sure that you don’t withdraw money from this account unless there is any emergency. However, you should note that it will take quite some time to accumulate money in your account.
(2) Health insurance
Medical emergencies can crop up any time without giving any prior notice. In order to save your hard earned money, you should definitely opt for a good heath insurance policy. If your employer offers you a health insurance, then it is well and good. If not, then you will have to purchase a health insurance policy of your own. You should contact the local insurance companies and check out what type of policies they can offer you. They may even help you get a health insurance policy with pre-existing health conditions.
(3) Insure your assets
You should insure all the important assets that you own. Thus, it is very important to insure your home, cars, and all other costly possessions. If you own a piece of real estate then, you should make sure that you insure for full replacement value which is indexed for inflation. You can contact the local insurance provider and bundle up all your insurance policies. This may help you get better rates and terms on your insurance.
(4) Life insurance
It is very important to have a life insurance. This will ensure the financial security of the people who are dependent on you. They are your responsibility and you will have to fulfil their needs. A life insurance will actually help them survive the tough time that they might face after you are no longer there to help them.
(5) Long term disability coverage
When you grow old, i.e. when you’re 65 years or more of age, there is a high chance that you may face long term disability which will not allow you to work for more than 90 days. In such a situation, long term disability coverage is of great help. If your employer does not offer this kind of coverage, then you should look out for individual coverage.
Hope the above mentioned ways will help you remain prepared for any kind of financial emergency.