emergency planning money in jar - financial planning services farmington CT
  • By Emma Andrews
  • Posted January 21, 2021

Situations That You Need to Be Prepared For Financially

One of the few certainties of life is change. Change, while ultimately a good thing, is rarely comfortable. It’s often downright unpleasant. When it comes to events that change your financial situation, that is often even more true, since such events tend to have a negative impact far more frequently than a positive one. It’s a good idea to be aware of events you might find yourself facing so you can develop a plan for how to deal with them.

Job Loss

Most of the time, people don’t plan to lose their job. If 2020 proved anything, it was that a previously secure job wasn’t quite as secure as originally expected. Even if you did manage to keep your job last year, there’s no guarantee for the future. It takes an average of five months to find a new job, from the time you start submitting applications to the time when you receive and accept a final offer. It could take less, it could take more. The industry you’re looking for a job in, your qualifications, and the current job market will all factor into the time it takes. Work on building up a rainy day fund that you can live off of for a few months if you find yourself out of work.

Emergencies

Emergencies have a way of catching people off guard in a way that few other events can. Medical emergencies, natural disasters, and accidents can all have serious negative consequences for your financial situation. As with a job loss, the best way to prepare is to build up a savings fund you can dip into should the need arise. If you have financial investments, you may be able to liquidate them to cover some of your expenses. As a last resort, you could apply for a loan. You can get a short-term personal loan even with poor credit. This option leaves you in debt though, potentially putting yourself in an even worse position financially, so this should be a last resort sort of thing.

Changes in Family Dynamics

The birth of a new child or the death of a family member can dramatically impact your financial situation. Childbirth is expensive, regardless of whether or not you have insurance. While it’s not an unexpected cost, how difficult it is to get quotes can make planning tough. A death in the family comes with its own set of expenses too. Funeral plans, the potential loss of income, and end of life necessities can all add up to a staggering amount. Carrying health insurance and life insurance policies can help offset some of these expenses.

At the end of the day, you are your most valuable resource when it comes to dealing with situations that present financial challenges. Job loss, emergencies, and changes to family dynamics can all hurt your finances. Your best move is to make sure you’re financially prepared ahead of time to minimize the damage such events can incur financially.

For more help with your expenses, schedule some financial planning with us!


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