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Tips to Protect Your Family’s Financial Stability

You work hard for your family. A home, two cars and monthly bills coming in at a steady pace mean that you need a good income. Everyone contributes their income to the household’s bills. If those funds suddenly stop, however, financial instability is the result. Discover the basic ways that you can protect your family from financial instability. The preparation is worth it in the long run.

Purchase Life Insurance

Life insurance covers the “what ifs” in the event of a family member’s death. The covered person may have been the main income for the household. Without that salary, the household is in financial jeopardy.

This insurance pays out to the beneficiaries so that bills can be paid. In some cases, the mortgage might be paid off too. Every family will have different insurance needs so consulting with a professional is critical in this case.

Set up a Will

Alongside the life insurance should be a will. This document sets forth a precedent when it comes to dispersing funds to certain family members. An estate lawyer Columbus Ohio might draw up the document several years before it’s ever needed.

Although your financial situation may be relatively humble, don’t go without a will for too long. A clear document stating your requests will keep the money safe and free from any freezes forced onto it by a court of law.

Start an Emergency Fund

If you can’t fit insurance or a will into your immediate plans, consider an emergency fund at the very least. Create a savings account at the bank that you never touch. Allocate enough funds into the account to cover about six months of income. If a real emergency arises, such as a medical problem, the funds are there to support you. You avoid any use of expensive credit with a money fund to borrow from whenever necessary.

Be aware of the benefits that you might gain from the government if disability comes into play. There are programs that help people in difficult situations. You must simply do the research to understand your rights.

Building an emergency family fund

We all heard about saving for a rainy day; it is instilled in us from a young age and for many of us it is art of our financial lives. However, in this age of austerity it is harder than ever to start putting together a nest egg for when unforeseen emergency may arise.

Life, as we all know, is unpredictable; we get ill, houses flood and hurricanes hit, it is just part of life. What many families don’t consider though, is how they would manage financially in times of extreme crisis: whether it’s saving for a fund, making sure you are insured or what credit options may be available to you. Having an emergency plan in place such as this is important and can certainly make the stress a little easier to handle.

Before, we look at how we can make small changes to our spending in order to save money; we need to understand what we can do to rectify a financial emergency if we don’t have a fund. Financial emergencies can be caused by a number of factors, from medical bills, house repairs and unexpected utility issues. Whatever the form of emergency, each one is stressful on both yourself and your children. If you don’t have the funds to cover these unexpected payments, then you could incur late payment charges or similar; it is this situation that short-term loans like those of Payday loans from Dollars Direct Canada can help.  This form of loan is designed for emergency use to help you in between paychecks. If you feel that you are in the midst of a financial crisis, then have a search online to see what loan options are available for you.

Create your budget plan

The first thing to consider when looking to start your emergency fund is a clear and precise budget. This will need you to really look at your finances under a microscope, a difficult thing for many people to do. Start with your incoming cash and then the expenditure that has to go out. This could include your mortgage, bills, childcare, school fees, food etc. This will give you a basis to start working from.

Once you can see the cash you will have left over every month, then you will have a clear idea of the amount that you can actually afford to save. Remember, it doesn’t matter if you can only afford $30 a month, that amount will soon add up over the years. When creating your budget it is also worth considering the area that you live in and if this poses any emergency risk, high flood risk, forest fire issues, earthquakes etc. Not something anyone wants to think about, but in reality, this can help you to save more if you are at immediate risk.

Small ways to save BIG

Each month we all make regular small payments for life style things we may want, whether this is lunch money for the children or a latte on the way to work. It is these payments that you need to consider stopping and saving the money. In general, you may not think that cutting out a latte will really save you a decent amount of money, but in reality that $5 a day will add up to around $150 a month – now that is a nice amount for an emergency fund.

Don’t worry though, you don’t have to cut out that coffee or shop brought lunch every day. Instead, consider making your own latte and a packed lunch from time to time. It may take your children a little getting used to, but you can be creative with what they are eating and be secure that you are covered financially.

Finally, there are other emergency financial needs that you may want to explore. It is always important to keep you insurance up to date, whether it’s vehicle, home or contents insurance, having this up to date and within easy access is very important to reducing your stress.