Tuesday, May 3, 2016, PM | Leave Comment
When making your monthly budget or saving money back for a rainy day, it can seem difficult to imagine that a single event could wipe out all of your careful financial planning.
However, sudden financial crises are very real and happen to thousands of individuals and families every year.
If you are not properly equipped to deal with such crises, getting past them can be virtually impossible.
Here are five of the most common unexpected financial crises you may encounter in your lifetime, along with some ideas for dealing with them.
Sudden Medical Crisis
It’s no secret that the cost of health care has risen exponentially over the past few decades. A single visit to the emergency room, let alone a stay in the hospital, can now cost thousands or even tens of thousands of dollars.
If you are paying these costs out of pocket, your savings can easily be diminished or wiped out. Though it will take a chunk of your earnings every month, carrying medical insurance is by far the best way to prevent such a financial crisis.
Being Fired or Laid Off
We all like to think that our jobs are stable and reliable, but this is rarely the case. Firings and layoffs can suddenly wipe out your income stream, making it difficult to support yourself and your family. This is why it is best to have enough money saved back to cover about three months’ worth of expenses and keep your resume current.
The car you drive every day is likely one of your two or three most valuable assets and can be very costly to replace if it is totaled unexpectedly. Comprehensive automotive insurance can help to offset this expense and any medical bills that may result from the crash.
Injury at Work
Being injured at work can damage your earnings and incur many medical expenses. Companies will usually pay out, but you may have to retain professional legal assistance, such as a personal injury attorney at Buford & Gonzalez, to get what you are owed.
Many of us keep our retirement savings in the stock market, and a crash can rapidly deplete those savings. Keep a well-diversified portfolio to avoid losing too much in one place, along with non-stock retirement savings as a backup.
Though there are many types of financial crisis, these five are the most common. Preparing for them can help you and your family to avoid long-term financial troubles.