How to prepare for a financial emergency
Life can throw you curve balls. Injuries, accidents and other unexpected situations can affect you. When the unexpected affects your finances, it can cause problems for many.
You’re not alone if you’re dealing with financial hardship. Financial emergencies can happen at any time. If you’re not prepared, it could affect your short and long-term financial health. Being prepared can make money management easier.
Here are some ways you can prepare yourself for financial emergencies:
Financial advisors recommend saving three to six months of living expenses in an emergency fund in case something unexpected happens such as job loss, car repairs or injuries.
Evaluate your expenses
Knowing your spending and saving habits can make it easier to deal with unexpected financial emergencies. Keep track of your expenses and find ways you can cut to cover essential expenses such as housing, food and utilities. This will help you determine where you can save. You may be able to cut out extra expenses such as takeout food and subscriptions.
Reduce your debt
Another way to improve your financial health is start paying down debt. If you are already taking care of it, consider increasing how much you’re paying. Try making more than the minimum payment. If you’re only paying the minimum, it could take years depending on how much you owe. It could cost you more in interest. Although you may not be able to pay it all down, every little bit adds up.
If you have an outstanding balance on your credit card, remember that additional purchases are added to that balance and interest accumulates. Make sure you have the money to pay in full for purchases or will have the money when your credit card payment is due.
Pay yourself first
Try putting some money in savings first. If you wait until you’ve paid your bills and other expenses, you may not have enough to put into savings. Start by saving small. It could add up quickly and help when an emergency occurs.
If you’re dealing with unexpected expenses, check your insurance for coverage. Check the fine print on your policies to see where you have coverage. This could help you avoid any unnecessary expenses. Review your health, car, homeowners, renters and disability insurance for any possible protection from types of emergencies that could potentially drain your finances. Contact your insurance providers directly if you have questions on your coverage.
The information is this article was obtained from various sources not associated with Adirondack Bank. While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. Adirondack Bank is not responsible for, and does not endorse or approve, either implicitly or explicitly, the information provided or the content of any third-party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. Adirondack Bank makes no guarantees of results from use of this information.