Personal Finance Tips – Prepare for Financial …

[ad_1]

Preparing for a financial emergency is often difficult. Many people simply don’t even think about what could happen because they are living day to day just trying to make it. However, having an emergency plan will help prevent trouble should something happen. Emergencies can lead to major trouble when you do not have the finances to handle it.

Very few of us think about what would happen if we lost our job or suddenly became too ill to work. In many cases it’s too awful to consider, especially if we’re living paycheck to paycheck with a job as it is.

However, the fact is that financial emergencies happen to almost everyone at some point and they can have a devastating effect on your credit. In fact, most people who declare bankruptcy do so because of a major financial disaster such as sudden unemployment, huge medical bills, a lawsuit or divorce. Despite this, few people plan for these problems, even though they can happen to anyone.

If you want to keep your credit score good, you must know what you will do in case of emergency. Developing a realistic written plan can help you take action to save your credit as quickly as possible in an emergency. Some of the items to include in your financial emergency plan may include:

1) List all the assets you can eliminate if you have to.

2) A list of all extras or luxuries that you can cut out of your life immediately if they become a problem (i.e. newspaper subscriptions, cable television, water delivery service, Friday nights at the movies).

3) A list of any resources you have that can help you in an emergency. You may know of a lawyer who deals with the financial aspects of law. Maybe you have insurance that can help you. Your employer may offer a severance package. Whatever it is, write it down. Having a list of these resources will make it easier to reach them in an emergency.

4) Other ways you can get money if you have to – jobs you can take, things you can rent to others.

The bottom line is to have a plan. You need something so that when disaster strikes, you can handle it without being in financial trouble. Worrying about an emergency will keep you stressed enough that finances don’t even have to drag you down.

[ad_2]