Are You Prepared For The Unexpected?
Prepare for the unexpected with these tools and ready yourself and your finances for anything that comes your way.
Hope for the best. Prepare for the worst. This piece of advice can be applied to pretty much anything – including finances. A recent study from Bankrate shows that only 39% of Americans surveyed could cover an unexpected expense of $1,000 without additional stress.
From needing new tires to losing your job, anything can happen. Here are some tips to help you get financially ready for anything coming your way.
Budget
It’s almost impossible to talk about planning for the future without first talking about budgeting. Take control of your money and create a plan that dictates where exactly your money goes so you aren’t left wondering.
Be sure to modify your budget as your situation changes. If you’re earning more, start saving more. If your rent increases, spend less elsewhere and figure out how you can shift funds around.
Save
This is one of the biggest favors you can do your future self. Save for retirement, a rainy day, and big purchases – plus anything else that’s important to you. At a minimum, aim to have an emergency fund that will cover six to 12 months of expenses. How much will you need? Find out by tracking your expenses and income for 30 days. You’ll sleep a little better knowing you have a cushion to fall back on.
Reduce Debt
Unfortunately, bills won’t stop if an emergency arises. As a borrower, you’re still responsible for mortgage or rent, car, student loan, and credit card payments. If you have the means to put additional funds towards your debt now, do it. While it may seem like an inconvenience, a payment or two can make a huge difference when working with limited funds.
Balance
Our financial wellness partner, BALANCE, can help explain your options for getting out of debt.
Get Insured
Insurance can help you in a variety of ways and provides a good safety net in case things go wrong. For example, homeowners insurance covers incidents that occur to your home or property, including damage from a storm, other natural disasters, or theft.
Review your policies periodically to see what coverage you need and update it with any major life changes.
While you don’t have to be scared for the future, it’s a good idea to be as prepared as possible. By creating a solid budget, adding more to your emergency savings, minimizing debt, and reviewing your insurance regularly, you’ll be well on your way to financial readiness.
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