Organizing Your Budget to Be Ready for a Financial Emergency

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Emergencies happen. It’s just an unfortunate fact of life that everyone will face at some point. They’re unexpected by nature, so you can never prepare for every potential disaster, but that doesn’t mean there’s nothing you can do about it. Organizing your budget to be ready for a financial emergency can help you handle life’s roadbumps a little easier, and we here at LoanMart have some tips to help you do just that.

Factor an Emergency Savings Account into your Budget

It may seem obvious, but starting an emergency stock is always a good idea. No matter what the emergency is, having an account dedicated to covering them when they arise is a great idea. A great way to start one of these is to just take a small portion out of your paychecks that regularly goes into the emergency account. Putting it into a savings account is also the clear best option, because you’ll be earning interest on that fund slowly, adding more to it over time. Emergencies tend to not all happen at once, so chances are you’ll have built up enough since the last one to cover your new issues.

In addition to your savings account, it’s also recommended to have a stash of emergency cash in a safe place in your house. It doesn’t have to be a huge amount, but usually enough to get transportation out of a bad area is always good. If you end up in some terrible disaster like an earthquake or a landslide, a credit card or ATM might not be viable options. But that stack of bills will always be good no matter what the scenario, so it can’t hurt to have some on hand as a backup to your backups.

Get in on Insurance

In a disaster, the worst thing that can happen is being forced to start over from scratch. It can be a hard pill to swallow, especially if you’re put back to less than you started with. That’s why having insurance is so important. It gives you a solid foundation to start from, and can help you get back on your feet quickly.

Homeowner’s insurance is a great one to have in case of natural and weather-based disasters. Rainstorm knocks a tree into your loft? Mudslide ruins your porch? Earthquake shakes up your foundation? Homeowner’s insurance can cover all of these and more, helping you rebound on the damage done to your home. It can help cover outside damage as well as inside, and keeping a roof over your head is certainly important enough to make it worth it.

You’re gonna get sick. No matter how careful you are about washing your hands or keeping yourself free of germs, you’ll eventually catch something. And hey, you’ll need something to deal with that, and that can get pretty expensive. Which is where medical insurance comes in. Medical insurance covers not only your medical exams and visits, but also covers any prescriptions you’ll need as a result. Though not all of these can be considered emergencies, overall it will help you save money for when the actual emergencies do show up.

Get all your Documents Together

When in an emergency situation, it’s important to have the relevant documents available when you need them. When you need to bounce back after a disaster, not having them on hand can make things much more difficult, so keeping them all together is important. But on-hand at your house isn’t always the best option in the case of a fire or some other physically destructive event. So what do you do instead?

When storing your important documents, one of the best places to keep them is online. That way so long as there’s an internet connection, you’ll have access to them. There’s numerous cloud storage services as well as individual websites that allow for that kind of hosting, so research which one works best for you and which is safest, and you’ll have a great place to keep them.

Another method is to store them on an external drive, like an SD card or a USB stick. These can be purchased rather cheaply at most convenience stores nowadays, and provide a safe, portable way to have your files on hand. Much easier to keep on your person than a massive stack of papers. On the downside though, that also makes them easier to lose, so if you do decide to go with this method, just make sure you keep track of where your storage device is at all times so as to not to lose your documents with it.

Finally, if you really value having the physical documents, or are super worried about online security issues, there’s always the option to have your documents put into a safety deposit box. These lockboxes, held at specialized banking institutions, give you increased security at the cost of availability. They won’t be within arms’ reach, and you’ll need to make your way to the institution to retrieve them, but you can be sure that they’ll be there.

Financial emergencies will pretty much always blindside you, but that doesn’t mean that there’s no hope. Careful preparation can help ease the pain of a disaster and make getting back to where you were so much easier. With the help of a budget that accounts for a potential disaster, you’ll likely not be able to get back to full potential immediately, but you’ll have plenty to help you get back on top quicker.

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1Loan approval is subject to meeting the lenders credit criteria, which may include providing acceptable property as collateral. Actual loan amount, term, and Annual Percentage Rate of the loan that a consumer qualifies for may vary by consumer. Loan proceeds are intended primarily for personal, family and household purposes. Minimum loan amounts vary by state. Consumers need to demonstrate ability to repay the loan.

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