Almost everyone is ONE financial crisis away from financial ruin, but we don't have to be. Being prepared financially can take a lot of stress and worry away from your life. Here are somethings you can do to be prepared for that next crisis:
Pay down debt and ditch the credit cards
The interest you’re paying on your debts and especially your credit cards is destroying your long term financial plan and putting you at risk if a crisis does happen. Chances are, these debts are a significant bill every month. Now think about this. What if you didn’t have any debt and could be using that same money to set aside for savings, an emergency fund, or a retirement account. Your money deserves better. Make this the month where you take initiative and destroy your debts and move on with life and secure your future.
Look for extra income streams
The fastest way to build up your cash supplies and better prepare yourself for an unfortunate event is to look for ways to make extra money. Whether it’s through a side business or as simple as holding a garage sale, making that extra cash is key to boosting your income and securing your assets.
Excellent insurance coverage
Insurance is one of those things where there is a very fine line. On one hand, you don’t want to be overpaying for insurance but you also don’t want to go cheap and have missing coverage. It’s up to you to get the research done and make sure you have excellent coverage. Shop around and compare quotes from multiple companies. And don’t forget about disability insurance.
Build an Emergency Fund
This may be the most important thing you can do to prepare for a financial crisis. You don't have to put tons of money away a month, especially if you are paying down debt, but getting an Emergency Fund started and funded is a huge key to being able to avoid a financial crisis. Start buy opening an ING account - to protect your savings from you, since it takes 3 days to transfer the money - and set up automatic deposits from your checking account. After awhile you wont even miss the money and will forget about the EF. One day you will look up and have $100's, maybe $1,000's saved.
Are you prepared?
Anything can happen in life. Being prepared will put your mind at ease in case something drastic happens. The goal of preparation is not to prevent a disaster. The goal is to take a crisis event and turn it into nothing more than a minor setback.