Monday, July 25, 2016, AM | 1 Comment
Many Americans are struggling financially right now because of the current economic conditions.
Many of them are living paycheck to paycheck, so even the smallest financial emergencies often leaves them scrambling to cover anything that is beyond their basic expenses.
With a good plan, this can be changed. Read on for seven common issues that can happen to a family that isn’t financially prepared and some ways that they can be prevented.
Illnesses or Hospitalization
No one knows when an illness will strike, and hospital bills can quickly eat up any savings that the family does have. In this case, prevention is the best solution.
Every breadwinner should have some form of health insurance that covers major medical expenses as well as the loss of income due to illness.
It might seem unnecessary if your health is currently fine, but in the long run, having a back-up plan is never a waste of money.
Always have an emergency fund of some kind that is never touched except in desperate circumstances when you have no other options.
This could be for times when the family car breaks down, or the furnace needs to be repaired in the middle of the winter.
Even if you can only contribute a few dollars a week to this fund, over time, that amount will build-up, and you will be closer to financial security.
If a family is already in a tight position financially, one of their worst fears will probably be losing their job suddenly.
While most experts agree that everyone should have at least three months of wages saved up in case of this kind of situation, not everyone can afford to do that.
Fortunately, there is a solution. Job-loss insurance will help you pay your bills until you are able to get steady employment again. It is surprisingly affordable and worth every penny.
To prepare for unexpected legal issues, always shop around for an attorney before you need them.
This might seem silly if you have never had legal issues before, but it can be extremely difficult and expensive to locate an attorney in an emergency situation.
If attorney’s fees aren’t in your budget, be sure to do a search for local free legal services in your area.
Credit Card Debt
In desperate financial times, many people start paying their expenses with their credit cards. This can quickly turn into a mountain of debt that they cannot afford to pay off.
Instead, families should consider seeking out local social services that can advise them of places where they can get help with utilities, rent, and food assistance. This will ease their monthly financial burdens considerably.
Spending too much on unnecessary items or entertainment makes saving money impossible.
Always pay bills and important expenses first. Then, contribute to your savings account and emergency fund.
If there is still income left, this can be used for entertainment on special occasions.
Always do your best to pay bills on time and in full. If you don’t, it may severely impact your credit rating, and bad credit can make it next to impossible to get a loan or credit card.
If you have bad credit, Lexington Law credit repair professionals can help raise your credit score. With the help of financial professionals, you can get back on track and have a brighter financial future.
With careful financial planning and preparedness, catastrophes like these can often be prevented. It might seem scary to consider possible worst case scenarios, but by doing so, a family will know what to do in case they ever do happen.
If you need help forming a savings plan to help your family get ahead, many financial institutions will offer free advice to help you get started.Facebook.com/doable.finance