No matter what you do, things happen in life. Sometimes it feels like you never get a break but the truth is, we do have breaks from disasters all the time. We don’t always take the time to plan for the future, though, so if you want to weather a financial hardship or emergency, start planning right now.
· Build Your Emergency Fund Now – When you are not experiencing issues, this is the time to start planning and setting up your budget so that you can get through most emergencies without suffering too much. If you have no emergency fund, make this your first order of business to take care of now.
· Take a Beat – When an emergency happens, don’t make decisions right away. Instead, only make decisions based on your emergency plans. If you don’t have plans, give yourself a break to understand your choices before making potentially devastating choices.
· Evaluate Your Needed Expenses – Everyone needs a basic bare-bones budget that they can revert to during hard times. Set this up in advance so you know what it looks like if something should happen. For example, you don’t need cable TV or an unlimited mobile plan, or your daily coffee fix.
· Contact Credit Card Companies – If you have consumer debt, contact your credit card company right from the moment you know there is an issue. You can usually put off payments for 30 to 90 days or change your due date.
· Check Your Insurance Policies – Depending on the emergency, your insurance might pay you something. Some life insurance policies can even pay out during sickness. Check your policies to find out if you’re qualified for anything. No one is going to tell you; you have to check.
· Start a New Income Stream – There are almost always ways to earn extra money: by dog walking, childcare, grocery delivery, rideshare companies, and other gig positions.
· Sell Your Stuff – If you have a lot of stuff that you don’t use or aren’t going to be able to use due to the crisis, you can sell some of your stuff. It might feel like a waste, but it would be worse to go into debt to keep the stuff. Try using Poshmark.com, Mercari.com, eBay.com, and the Facebook Marketplace.
· Prepare for the Unexpected – As usual, you’re going to always do better during any crisis if you’ve done the work in advance. If you’re in a good place right now, it’s time to prepare for emergencies. Don’t wait.
The main thing to learn from any emergency financial planning is that stuff happens. You cannot stop this, but you can set up a plan in advance of the emergency that builds your emergency fund, makes it easy to set up a short-term emergency budget, and keeps you from making bad choices due to fear. Planning is crucial to your success in getting through any financial emergency.
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