5 Types of financial emergencies
Plan now to avoid stress
Losing a job
Additionally, you could look into other pathways for establishing a safety net if you lose your job. Research portable benefits that will allow you to maintain your benefits between jobs, and consider tapping into or consolidating the funds of your employee-sponsored retirement plans in the event that you need additional funds until your next work opportunity.
We also encourage you to research the payment plans your hospital or healthcare care providers offer. Although everyone's financial policies differ, many institutions will accept low monthly payments to accommodate unique circumstances.
Medical debt is now being treated differently when it comes to credit reports and scores. As of mid-2022, the three main credit bureaus have removed medical debt from their reports. VantageScore will be removing medical debt from score calculations in the back half of 2022. This is great news for those who have had challenges paying off medical debt. For additional help with these bills, you may look to hire a Medical Bill Advocate. These are trained individuals with experience reading medical bills and know common costs for care. They may be able to spot billing errors and overcharging. Just be sure to consider the costs of hiring this type of help and fully understand what service(s) they’ll be proving.
Unexpected home repairs
Unexpected car repairs
Death in the family
If you’re able, you should try to speak to your older loved ones to make sure you understand what they want to happen to their money in case something should happen. Read our article for some tips on how to have this conversation.
In regards to funeral services, it’s not too early to establish a budget and research funeral homes in your area. It’s important to be realistic while also respecting the budget you established. Unfortunately, some businesses have been known to leverage mourning people’s guilt so that they’ll spend more money. Learning about the services and costs in your area before you need them is an important way to avoid being taken advantage of during a trying time.
No one wants to think about these things happening to them, but the truth is we all need to be prepared for financial emergencies with some careful foresight. However, the common thread in preparing for all of these situations is building a savings account. When you have built up personal savings, you can handle unexpected expenses knowing that it doesn’t put your larger finances at risk. We’re all in for some unexpected expenses in our lives, we just don’t know when or what. To learn more about your options or start a savings account, schedule a consultation with one of our financial professionals.