How To Plan For Financial Emergencies
it be nice to adapt to change easily and gracefully? To offset
the wallet-shock an unexpected life change can bring? You can.
Whether you have one year or one week to adjust to such monetary
upheavals as marriage, divorce, a growing family, or military
deployment, you can sail through financial foul weather - as long
as you PLAN for it.
This first step will help you understand how much money you have
to work with. It is vital to putting together a practical strategy
for the future. If you don't already have your financial documents
in one place, it may require a little hunting and gathering (and
once you do, keep them accessible, be it on your computer or in
a folder in a corner of the kitchen. Be and remain organized for
the next inevitable change). You will need recent bank and credit
card statements for account balances, current loan papers, pay
stubs with income, tax, and deduction information, and your checkbook
register for household bill information.
it all together? Good. Now carefully examine and notate your current
income, expenses, assets and liabilities. You will need all this
data for the next step in your PLAN
Ignorance is not bliss! Learn how this event will alter the way
you currently spend and save. If there will be additional or increased
expenses, you will need to be acutely aware of their type and
cost. More gas for a longer commute? Diapers or daycare for a
baby? The last thing you want is to be hit with a big, unexpected
expenditure after you worked out a feasible money management plan.
know how the change will affect the numbers in your financial
picture, you may need to conduct some research. Thankfully, there
is an abundance of free to cheap (yet high-quality) information
available. Websites, books, magazines, friends and family members
who have experienced what you are about to go through are all
useful sources to tap. Contact your financial institution for
ideas and options. If you are in the military and are facing deployment,
be sure to investigate the plethora of programs that are specific
to your needs and situation.
a life change will inspire new goals. You may want to start an
educational IRA to fund your child's college tuition, or save
for a down payment on a home. Take the time to assess long-term
objectives and figure out how much it will take to achieve them.
They too will have to be factored in to your newfangled budget.
Now you need to put your PLAN into action. Because you have completed
the first two steps, you should have everything necessary to smoothly
transition from old to new. Plug the revised numbers into your
budget. Are you over or under? You may have to modify spending
habits, reduce expenses, or even sell assets to meet the needs
of the pending change in circumstance. Other action items may
include opening a savings or investment account, adjusting tax
deductions or exemptions, obtaining or modifying insurance coverage,
or meeting with a financial professional for long-term planning.
inertia - sitting around hoping things get done is tempting but
self-destructive. All the knowledge and assistance in the world
won't help if you don't do what you need to do.
Finally, reach out and connect with those who are, or have been,
in the same position as you will be. The impending financial predicament
may be new to you, but there are scores of people out there who
have weathered the storm and come out dry. They can provide you
with not just information, tools, and ideas, but also the support
you need to be successful with even the most challenging of changes.
Ask people in your familial and social circle for suggestions
and connections, contact your employee assistance program for
free programs and services, log onto online forums and chat rooms.
You may be surprised by how enthusiastic others are to share their
wisdom and encouragement.
change isn't a matter of if - it's when and how. Think of it as
an opportunity to grow and be self-sufficient under even the most
daunting of financial conditions. You can do it. It just takes
a good PLAN.