Are you prepared for a financial emergency? At some point, it will happen, whether it’s due to recession or some other event in your personal life. Let’s put together your emergency survival kit now, while you can still think straight. Wait until panic sets in and you’ll make desperate decisions.
Here are 5 ways to prepare for a financial emergency
One – Cut Spending Now
This will help create different habits, so you can live on less if you need to, and provides money for emergency savings.
Two – Beef Up Your Emergency Savings
If you’re stressed about losing your job, paying for a medical emergency or being able to replace your car, it’s time to focus on short-term survival. That means having an emergency fund to see you through day-to-day life if something major or unexpected comes up. Start saving now! The alternative is debt.
Three – Gather Resources and Create an Emergency Plan
Your plan includes emergency savings, but it goes far beyond that. You never know how much money you’ll need or how long it will need to last. Think about other resources you can use to survive, besides money. Ask yourself a few questions and write down the answers!
What will you need? Examples: food, clothing, shelter, electricity.
Now, think about what you already have. How much money do you have now, and how much can you build into emergency savings? How much food do you have? If you couldn’t get to the grocery store, how long could you survive with what’s in your home now? Do you have storage space to build reserves? Are there things you could sell to put more money into your emergency savings?
Now that you have a list of what you would need and what you already have, create a third list to answer the question: how can I get what I still need?
Food: Make a list of foodbanks in your area, along with churches that provide food distribution on a regular basis. List dates and addresses, so you have the information readily available when you need it.
Family & Friends
While you may not want to borrow money from them, consider exchanging your time for services they need, like housecleaning or babysitting, and let them pay you for those services in cash, groceries, gas for your car or help paying the bills.
When you’re facing an emergency, you need to get resourceful! Don’t be proud! Ask for help! There are many resources out there. Take the time to look for them. Do it before devastation occurs. This way, you’re prepared and don’t have to put a lot of thought into it, when you’re in panic mode.
Four – Diversify Your Income
Get a side job now that can provide extra savings for your emergency fund and work as a fallback in case of a job loss or pay cut.
Five – Prepare for a Job Search
If you’re worried about losing your job, this is the time to update your resume, search for jobs in your field and make a list of connections you can reach out to, if the need arises.
Start Planning Now!
Financial emergencies happen to everyone, at some point. Planning ahead is the best way to make it through the rough times faster and with less stress. If you need help creating an emergency plan or want to brainstorm about ideas for being prepared, get in touch with me and let’s chat!
“Debt Free in ’23” Workshop
Join me on Saturday, May 13, 2023, from 2-4pm Pacific time for this FREE event. Here are all the details.