Preparing for the Financially Unexpected
By Shannon M. Medisky
It may be common knowledge to have an “ICE” (in case of emergency) number listed in your cell phone, but what about establishing ICE financial efforts in advance? In today’s economic climate, it’s important to prepare now for the worst. While you may very well not be able to anticipate the unexpected, you can at the very least prepare a few strategies and formulate some plans now to put into effect should they be necessary in the future. Doing so will help safeguard the financial resources and investments you do have, protect your credit rating and even help guard against the negative stress that financial woes undoubtedly bring.
Keep stock of your liquid assets. “Liquid” simply refers to an asset or resource that can quickly be converted to accessible cash (with minimal loss) should the need arise. Examples include savings accounts, savings bonds, money market accounts and even life insurance policies that carry cash value. While traditionally the goal of all of these are to build financial security for the future, they are also liquid in the fact that they can be tapped into relatively easily (and inexpensively) should the need arise.
Prepare your own financial safety net. Even if you don’t have a huge stockpile of cash in savings or any other liquid asset, all is not lost. Even those already living on a shoestring budget can create their own financial safety net. Purposefully stock up on shelf stable products when they can be purchased at a significant savings and fill your pantry. When times are lean, it’s a huge relief both emotionally as well as financially to know that every mouth in the household can be fed without spending a dime, leaving any “extra” funds that would ordinarily be budgeted for groceries to be allocated to another debt.
Educate yourself in advance to know where to go for help. When things take a turn for the worse, they often snowball quickly. Take a bit of time now to educate yourself on community resources and support services that are available to turn to when times are tough. From community food banks to potentially discounted payment plans with your local power company, it’s no secret that times are tough for nearly everyone in one way, shape or form and there are a variety of ways that communities and businesses are reaching out to help. Don’t think you have to wait until you actually need the help to educate yourself either. Start doing a bit of research on the Internet now so that you’ll know exactly where to turn when and if the need should arise.
Don’t wait to hit rock bottom. The farther you fall behind and deeper into trouble before you reach out for help, the harder it will be to climb out of the financial mess. If you foresee financial trouble ahead, reach out to your creditors in advance and explain the situation. Chances are they’ll appreciate your honesty and efforts to continue meeting your financial obligations in spite of your current setbacks. A quick call might help reveal a solution you hadn’t even thought of or thought possible.
Photo credit: vilmav55
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