That article is about Preparing for Financial Disasters. Financial disasters happen, they can range from losing your job, to a serious health problem to an actual disaster like your house being destroyed. Whatever the cause of the financial disaster it is important that you be prepared to deal with them. With a little bit of planning a financial disaster doesn’t need to be the end of the world. Doing a few simple things will help to ensure that if something does happen you are able to deal with it without it becoming a more serious problem than it has to be.
Probably the biggest thing that you are going to want to do in order to prepare for a financial disaster is to make sure that you have proper insurance. Most financial disasters occur as the result of something else going wrong, a health problem, the death of the family’s main bread winner, your house burning down or a variety of other things. Almost all of these things can be covered by insurance.
Making sure that you have the right insurance coverage is important for everybody and it will help make sure that if something bad does happen that the problem won’t get worse and result in a real financial hardship. The insurance money will also go a long way towards getting you back on your feet financially.
It is also important to make sure that you have some money put away in case something bad does happen. You won’t be able to insure yourself against every possible contingency so you will need to have savings to cover you for the times that you aren’t covered by insurance. Of course saving is important for everybody in order to pay for things like retirement but the money that you save for a financial disaster has to be easily accessible.
It isn’t going to help you if you have all of your money invested in something like an investment property that you can’t easily turn into cash. If you have a real financial emergency you are going to have to get your hands on your cash quickly so in needs to be easily accessible.
How much money you need to have put away for a financial disaster is going to depend on a lot of situations. The rule of thumb is that you should have enough to live on for at least three months however this is just a rough guide. A single person will need less than somebody with a family and an older person will likely need more money than a younger person.
One issue is that in the event you lose your job the amount of time it takes to find a new one is going to vary depending on the type of job you are looking for. In some career fields it could take much longer than three months to find a new job so in this case you are going to want to have more savings.