Anything can happen even when you least expect it—this is why being prepared for financial emergencies may just save you from stress and heartbreak. Here are some smart ways to prepare for these emergencies.
Take a step back and analyze
You need a calm mind to assess your financial emergency. If needed, vent out any frustrations you have. Once that’s done, carefully list down factors you can control. Doing so will give you a more helpful perspective on the proper steps to take for your emergency.
Note down expenses
Next, break down a list of expenses you need to pay. Prioritize which needs to be paid, such as food and shelter.
Aside from letting you know which expenses should be prioritized, listing down expenses will also give you a good idea on how to save up. By prioritizing, you may be able to identify certain bills that can lapse or be cut from the budget.
Check your resources
Assess how you can pay your expenses. If you have multiple revenue streams, find out if you have enough to cover your financial emergency. Look for new ways to get cash as well, such as borrowing money from loved ones or applying for a loan.
Reassess and plan ahead
Once you’ve addressed your current financial emergency, consider planning ahead for the next one, as well. By actually finding out how to deal with an emergency, you’ll be able to prepare for the next one with ease.
Common financial emergencies to consider
We’ve listed down some of the most common financial emergencies you may encounter in your life. Identifying these will give you a good idea on how to prepare for them.
1. Loss of income
Whether you’re running a business or working as an employee, losing a job or a client will definitely hurt your financial standing. Instill the mindset of setting aside some cash in case this happens to you. This way, you’ll have enough funds to cover expenses until you find a new client or job opportunity.
2. Natural calamities
Unexpected and perhaps the most dangerous among financial emergencies, natural disasters can quickly stress one out.
Have a separate account or cash in hand for these scenarios. The worst-case scenario would be not having access to any banking facilities during a calamity – it would be best to have some money handy in case you need it!
3. Death of a loved one
Funerals aren’t only expensive; the emotional toll you may experience may also result in various expenses, just to get over the hurt. Planning for death is important and practical, just so you can keep your budget under control.
Secure the situation with an emergency fund loan
RFC has an emergency fund loan to tackle those unforeseen circumstances. Get a flexible and easy way to address those emergencies today – find out more here. Stay in control during financial emergencies!