emergency funds in glass jar - emergency funds financial planning services farmington ct
  • Posted February 13, 2020

Why You Need an Emergency Financial Plan

There’s no doubt about it; life can be very unpredictable. The most common of these situations is facing a financial emergency. Situations arise when money is needed and needed quickly. This will often lead to a domino effect that can leave families and individuals in massive debt for years. This is why so many financial experts recommend creating an emergency financial plan. So, why is it important? The following list a variety of things that may happen that an emergency financial plan would come in handy.

Medical Costs

One of the most common reasons for falling into sudden debt is because of an unexpected medical cost. Medical treatment is incredibly expensive in the United States. Even if you have insurance, you could find yourself paying for other areas of medical services, such as equipment. If you suffer a traumatic brain injury, you might be forced to make adjustments to your home’s layout to accommodate your new needs. An emergency financial plan, in this case, will have allowed you to not only pay for medical equipment that your insurance plan might not have covered but also any monthly expenses you will incur while you’re not working.

Economic Recession

During the 2008 financial crisis, many families who thought they had a stable foundation soon found out that they should have not relied on their jobs alone to keep them afloat. Although experts are not predicting another financial crisis, as was seen in 2008, economic recessions are still possible. This is why it is important to begin implementing an emergency financial plan. This should revolve around your living expenses, such as mortgage payments, food, and anything needed for your children. It should be noted that your financial plan should not involve any luxuries such as dining out or subscription services.

Home Repairs

The weather, electrical surges, and everything in between can cause havoc on various appliances within your home. There are certain things homeowners simply can’t live without. Some of these include your boiler, air conditioner as well as your oven, to name a few. All those mentioned can cost you thousands of dollars in both purchasing the item and installation. This is yet another reason where an emergency financial plan would have come in handy.

Although these are only a few of the reasons why you need an emergency financial plan, there are plenty of more that could have been listed. However, this is simply to demonstrate to the public the importance of being prepared. Consult with your spouse and other family members to construct the best possible plan for your situation.

If you want help making your own financial plan, contact us to schedule a consultation!