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How to be Financially Prepared for the Unexpected

How to be Financially Prepared for the Unexpected

The unexpected is exactly that, unexpected. Unforeseen, unknowable. So how can you financially prepare for it? The answer is easier than you might think. We asked our Port Credit auto loans team to explain how anyone can financially prepare themselves for whatever life throws at them. We hope it helps!

 

Expect the unexpected

 

The key concept to understand here is that the exact nature of that unexpected situation may be unknown but we can be sure life will always throw us a curveball.

 

Whenever life seems easy or things are going well, that’s the time when something will happen. We may not know exactly when or exactly what, but we know something will happen.

 

That’s what we prepare for.

 

Save for the unexpected

 

The simple way to prepare for the unexpected is to save for it. The majority of serious situations we will face will cost money for one reason or another.

 

Whether that’s emergency repairs to your home or business, new car or truck to replace a write-off, medical bills or something else entirely, the majority of challenges we face are financial in one form or another.

 

So, we need two savings accounts. One, an emergency fund ready to cope with everyday emergencies like a burst pipe or something.

 

Two, a larger fund for more serious emergencies like what medical or car insurance won’t cover.

 

Set up an automatic payment for an amount you can comfortably afford for the long term. Send that money to an instant access savings account so you can get to it immediately should you need to.

 

Set an upper limit for those savings and anything over that, send to a second savings account. This would be for those larger or more serious emergencies.

 

You don’t have to save much, but save what you can. Even if it’s $40-50 per month, it all helps.

 

The more you have in savings, the less you’ll need to get into debt or rely on credit cards to get you out of the situation.

 

Other financial preparations

 

A couple of other financial preparations you can make include:

 

Getting adequate life insuranceLife insurance costs money and can seem like a waste until you need it. The same as car insurance. While it isn’t mandatory like car insurance, it is equally useful when you need it most.

 

Get an emergency credit card – Either get a credit card and lock it away and don’t use it or ensure there is always available credit on the card for emergencies. While we don’t want to rely on a card, it’s better to have one and not need it…

 

Have a Plan B budget – Budgeting is essential but we all want to live life. While you’re updating your monthly budget, prepare a Plan B budget you can implement should the worst happen.

 

This is a budget you would use if you lost your job or got ill and should include the absolute minimum you could spend or live on until things recovered. You hopefully would never need it but it should give you an idea of what you need to live on until you recover.

 

If you need help or advice on anything to do with auto loans in Port Credit, contact Car Nation Canada today, we can help!

 

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