No one can predict the unexpected, but it is a good bet that at some point, something unexpected will happen. Like that time my husband’s (then my boyfriend) apartment burnt down because his next door neighbor decided to leave his Christmas tree up until April (not a good idea!). He didn’t have renter’s insurance at the time and ended up really regretting that decision. So from that point on, we told everyone we knew to get renter’s insurance. It’s so worth it, and it’s only about $10 a month!
In many cases, these unexpected emergencies can have a major impact on your finances, and in other cases, financial emergencies can be completely catastrophic and devastating.
Not to be a Debbie Downer, but today we’re going to talk about 7 household emergencies you should be planning for because you just never know what might happen!
1. Major Household Breakdown
If you are a homeowner, you should consider the worst that could happen. A roof cave-in, a broken heating system in the winter, burst water pipe, or the burning out of a major appliance can all be situations that need to be fixed as soon as possible.
Most of the time your home owner’s insurance will cover the cost of a major problem but you may have to pony up for the deductible. Have some money set aside so you don’t have to put the expense on your credit card.
2. Major Illness
Anyone in the family could be injured or fall ill at any time. The medical bills can be financially devastating especially if you lack health insurance. Things can become increasingly difficult in your household if the person bringing home the paychecks is the one that is medically out of commission for an extended period of time.
3. Vehicle Breakdown
Most families rely on a vehicle to get to work and earn a living as well as to transport the family. If your family vehicle suffers a breakdown, the repair bill from the mechanic can be a major financial hit to your wallet, especially since many service providers will require payment at the time of service.
4. Impending Storm
Depending on where you live, you may have to deal with an impending storm like a hurricane or tornado. In such cases, evacuations may be necessary which can cost money for hotel, food, and other items when away from home. There is also a risk of losing your home or other belongings during the storm.
5. Identity Theft
If you ever lose your bank card, you are at risk of having all of the money in your account withdrawn before you even know what’s going on. Having your assets missing or frozen during the investigation process can leave you cash poor.
Be sure to review your credit report once a year so you can clear up any discrepancies you might see and shred any important documents rather than just tossing them into the recycling bin.
6. Job Loss
If an income-earning family member is downsized from their job, it can have a huge financial impact on the entire family.
There can be several reasons you are on the defending end of a lawsuit such as if you are at fault in a car accident or if someone is injured on your property. Depending on your insurance coverage and the circumstances, you may be required to pay out large sums of cash to the other party.
Image source: Hakan Dahlstrom