Sure, you can prepare for your future by planning for all of the expected things in life. Marriage? A new car? A house move? To ensure you don't run into financial difficulty, we all know that it's common sense to save up for such expenses, especially when you're also trying to live a life free of debt.
But then there are those financial dilemmas that crop up unexpectedly. Your car breaks down. Your health takes a turn for the worse. Your neighbor's tree demolishes your roof! Ok, the last one may be a little far-fetched, but you never know! Sometimes in life, you will be taken by surprise, and if you haven't prepared for these unexpected moments, then your finances might take a hit.
So, with the above in mind, you need to take steps to prepare for the unexpected. This is the key to a better financial future; safeguarding yourself ahead of time should anything good or bad happen down the line to take you by surprise and impinge on your finances.
Here are some of the ways in which you can prepare for the unexpected.
#1: Start an emergency fund
Okay, so having an emergency is probably not news to you, but many of us do not have an emergency fund. We know that it's a good idea, but despite the threat of the unexpected, we often procrastinate and put our money elsewhere. If this is you, let’s make today the day you should start your emergency fund. Even if it’s $1 as this will give you some financial security should you find yourself in an emergency situation. You might unexpectedly lose your job, for example, or you might need to make repairs to your home. Your emergency fund will soften the blow, as you should still be able to pay your bills, etc. despite the sudden expense that you have been confronted with.
To give your emergency fund a jump start, use these tips to make extra money. Then put a portion of your income into your emergency savings each month, perhaps by setting up a direct debit to apportion a share of your money into a dedicated savings account that has been set up for emergency purposes.
#2: Have the right people on speed dial
You don't have to manage your money alone. If you have people on hand to help you, then you can navigate potentially difficult situations that would otherwise put a dent in your finances.
The first contact you need on your phone is an accountant. Not only will he or she help you budget your finances, but should you ever be faced with something unexpected, such as a surprisingly high tax bill if you're self-employed, your accountant will help you find ways to legally reduce your bill, so you're not left high and dry.
You could also consider finding legal help ahead of time. You might talk to a business lawyer about business-related matters if you are working for yourself, for example, as they will educate you on such things as copyright and employment law to save you from any tricky compensation claims that might one day be filed against you if you accidentally broke the law. You might also have a personal injury attorney on speed dial, as in both your personal and professional life, you might one day need somebody with the relevant experience to help you win back any money owed to you should you ever get involved in an accident (possibly as a result of your neighbor's blasted tree). This will save you from high medical bills and other financial consequences, such as a lack of earnings if you need to take an extended time away from work.
And if you are working for yourself, you might want to have a business mentor on speed dial. Having experience in business themselves, they will have the knowhow to help you both save and make money within your operations, especially useful should your profits take a nose dive unexpectedly.
So, think about your life, the risks you might one day face, and the people who might be in a position to help you. Then add them to your phone so you will have their assistance should you need it.
#3: Ensure you have the right insurance
Do you have home or contents insurance? Should a natural disaster take place or should your home get burgled, you will suffer a financial loss if you don't have the necessary coverage. Do you have health insurance? If you ever do suffer an accident or if you do fall prey to a serious illness, you will struggle to cope if you don't have the means to pay for your medical bills.
There are some types of insurance that we all need, so to protect yourself from a financial disaster, ensure you are sufficiently covered in all areas to soften the blow of any unexpected event that would otherwise dent your bank balance. See the linked article for more.
As best as you can, try to be prepared for the unexpected! You never know when life will drastically alter because of unplanned for circumstances. Hopefully our suggestions will be a helpful guide to you in being financially prepared for anything that may arise in life.
About Money & Mimosas: Money & Mimosas was started as a passion project by Danetha, a former NFL cheerleader and CFO. After a brunch conversation with girlfriends, Danetha was inspired to launch a resource to learn how they could all enjoy life while being smart with their money. Because who doesn’t want to have their money and mimosas, too?