Emergencies: How to Plan for the Worst-Case ScenarioAnna Newell Jones
Planning for an emergency may be the furthest thing in your mind, but many emergency situations that can affect you financially will strike without any warning. Make sure you are at least considering the possibilities when you work on your budget and consider your savings goals.
Click through for 7 emergencies that deserve some forethought where your finances are concerned…
Emergencies: How to Plan for the Worst-Case Scenario 1 of 8
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Flood 2 of 8
If you live in a flood zone, you will be required to invest in flood insurance in most cases. However, even if your home is not right on the water, speak with your insurance agent about adding flood insurance to your coverage. It is a coverage outside of a standard homeowner's policy but can be essential if your home suffers flood damage unexpectedly.
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Fire 3 of 8
Besides insurance coverage, make sure you have a fireproof safe to store your most important financial documents and other valuables. In the event of a fire, you'll not have much time to decide on what to take. Consider what means the most to you and have your family practice emergency fire drills so everyone will know how to stay safe.
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Bad Weather 4 of 8
Inclement weather can come about at any time even if you don't necessarily live in a hurricane or tornado zone. Large thunderstorms can produce hail or fire-starting lighting so be prepared with the right insurance for your house and vehicles and an emergency cash fund for necessary house repairs. Keep cash on hand if you have to evacuate your residence due to an impending storm.
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Job Loss 5 of 8
No matter how stable you think your job is, you should be regularly contributing to an emergency fund that will be your fall back in the event you lose your income. A good goal to have is 3-6 months' worth of living expenses in an interest-earning account.
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Illness 6 of 8
Major medical problems can be unexpected and throw a large monkey wrench into your financial plans. Make sure you have sufficient medical coverage, a solid emergency fund, and understand your employer's policy for such emergencies when you are not able to work for a period of time. Also, proactive health care including regular medical evaluations, exercise, and a healthy diet can help prevent unexpected medical issues like heart attacks and strokes.
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Theft 7 of 8
Security for your home, vehicles, and personal welfare should be considered. Use common sense to ensure doors are locked and valuables are out of side. Depending on your location, you may also want to consider an investment in a security system and make sure you know your insurance company's policy on theft coverage.
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Long-Distance Family Emergencies 8 of 8
If you live away from your family, you should consider putting away some savings for unexpected family emergencies that will require you to travel. Have enough cash to ensure you can buy a plane ticket to get home on short-notice.
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