An important part of preparedness is being financially prepared to handle the situations that may arise in life. There are several steps you can take to be prepared to handle emergency and life situations. If you aren’t prepared than these situations can lead to bankruptcy or a complete change of lifestyle.
1) You should have health insurance coverage. You should always have health insurance. It is not worth the risk to not have it. If you have an appendectomy with no complications, the average cost is $15,000. If you have an accident while hiking, skiing or boating, it could cost you thousands of dollars without insurance. If you feel you cannot afford normal medical insurance you can purchase a comprehensive plan with a high deductible of about $5000.00. These plans can be inexpensive, but can save you down the road.
2) You should also carry homeowner’s/renter’s insurance, car insurance and possibly long-term disability insurance. These protect the assets you have accumulated. They will help to build your security.
3) You should have money set aside to handle emergency situations. Many people advise having at least three months of income set aside to cover emergencies. This will give you confidence, because you know that you can handle any situation that comes your way.
4) Another way to be financially prepared is to avoid debt. You should especially avoid credit card debt and other unsecured loans. These usually have very high interest rates. You can also become burdened under the repayment of the loans.
5) The last thing you can do to be financially prepared is to have a written budget with specific goals in mind. You may be focused on debt repayment, saving for a home, or saving for retirement. If you have a specific goal in mind then you are more likely to stick to your budget.
For more great advice on handling your finances you should visit the money blog.