Countless events in life are unplanned. While some of them, such as the birth of a child, may be joyous miracles, others can leave you in heaps of trouble.
Some emergencies can be so grave that they can leave you financially crippled for years. You may struggle to pay back what you owe.
Let’s examine five common emergencies that can appear without warning, and what you can do to minimize how much they influence your finances.
1. Emergency Medical Treatment
There are countless medical emergencies that can strike out of nowhere. Car accidents, work-related injuries and physically violent crimes are just three examples of situations that can seldom be predicted before they happen.
The problem with these incidents is that they tend to be so costly that very few people can afford these emergencies. The Centers for Medicare and Medicaid Services state that about fifty-five percent of emergency care is uncompensated.
The best way to handle these situations is to have some type of insurance plan set in plan that covers the cost of emergency care and related treatments.
2. Job Loss
In an economy that seems to be rapidly destabilizing, chances are that you may one day lose your job. While most companies will give you some severance pay or notify you ahead of time that you’re losing your job, seldom will you be prepared for the loss of your job.
The good news is that you can keep losing your job from crippling you financially. You need to keep a small “rainy day” fund to help you float a month’s expenses while you find another job to keep yourself afloat.
You can further reduce the harm of job loss by keeping updated on a given industry or by seeking additional training or education.
While the likelihood of divorce has decreased, there is still a one-in-three chance that a marriage will end in divorce.
Planning for divorce to happen is difficult, but it is possible. Prenuptial agreements can help lessen the impact of divorce, just as opening communications with your partner can help alleviate the financial strain it can place upon you both.
You may even be able to avoid divorce by opting for marriage counseling rather than divorce itself.
4. Natural Disasters
You have a few options to minimize the damage these things can do. You can reinforce your home, trim tree limbs and routinely repair your home after harsh weather strikes. This can minimize lasting damage that could turn worse.
If you live in an area where larger disasters could strike, then homeowner’s insurance is your next option. It can be a costly increase, but complete coverage for a $150,000 home can easily pay for that small monthly fee.
5. Death of a Spouse or Partner
When you live with someone like a spouse for a number of years, you grow to rely upon them for certain things. They may be able to repair your home, change your car’s oil, and bring a certain amount of income home.
When they die, you lose this. You also gain debt in the form of funeral costs and any debts attributed to your partner.
Preventing the troubles associated with the spouse of a death requires covering several bases. You should work to create a will that declares power of attorney, reduce debts, save money for funeral costs, and carry some form of life insurance.
This will make a hard time slightly easier to bear by removing the pressure that finances can have.
Overcoming Emergency Financial Situations
Preparation is the key to preventing emergencies from financially crippling you. Insurance, rainy day funds, money under the mattress and the right legal documents can make these disasters significantly easier to bear.
About the Author
Jessica Kane is a professional blogger who focuses on personal finance and other money matters. She currently writes for Checkworks.com, a leading supplier of personal and business checks. We want to thank Jessica for her knowledge and expertise.