Life is like a rollercoaster – there are lots of ups and downs, and a few surprises, that we have to navigate. Hopefully, if we are lucky, we will have many more ups than downs and more good surprises than bad ones. But there is absolutely no way that anyone on this planet, from the richest to the poorest, can avoid the unexpected altogether, That’s why it’s so important that we all take the time to prepare for whatever life might decide to throw at us.
From pregnancy to illness and eventually death (that’s not really unexpected, but the timing of it certainly can be), there are many things that we need to ready for. Here are some tips to help you be ready and waiting when they show up on your doorstep:
Expect the Unexpected
Okay, so you’re probably thinking, how am I supposed to expect the unexpected? It might seem like an impossibility, but really it isn’t. Although we’re all different and our lives can take pretty dramatic turns, there are a lot of similarities like job losses, pregnancies, divorces, illnesses and deaths, which more of us experience than don’t.
So, sit down with a notebook, or an app, and list as many potential surprises that could crop up in your life as possible. Then, try to put a contingency plan in place to cover them. You’ll probably miss a few things, and you might underestimate how big a deal having a baby is going to be, for example. But on the whole, the more prep you do in advance, the smoother things will go for you.
Live on a Budget
Living on a budget that ensures you always have more coming in than going out is imminently sensible for life, it is also the starting point that will help you to weather life’s storms and deal with those little surprises with more grace and a cooler head.
Being on a budget doesn’t mean you have to live like a monk – you can budget for treats – it just means balancing your personal budget so that there’s always a surplus.
Set Up an Emergency Fund
Setting up an emergency fund is the most important step to preparing for the unexpected. If you can save at least six months’ worth of your income in a savings account, then when you are hit by a job loss, or your car stops working and needs to be repaired fast, you won’t have to panic. Obviously. The more money you have, the less you and your family have to worry, so if you can build up more than the minimum six months’ worth, do try to do so.
Buy a Life Insurance Policy
Having a life insurance policy is really important for those unexpected and serious situations, especially if you have a family to think about. Should you end up in an accident, or struck down with an illness, which causes you to pass away, you want to ensure that your family can carry on as best as possible with their lives without having to worry about paying off the home loan or saving for college. Life insurance policies are pretty affordable right now, so it isn’t too difficult to get one without pushing yourself too far financially.
As well as getting a life insurance policy, you should ideally cover everything else in your life that is important too. It goes without saying that having good health coverage is vital if you don’t want to be made bankrupt if you or one of your family members is seriously ill after all.
Then, there’s pet insurance – you don’t want to have to make any difficult decisions in that area due to money, or a lack thereof, home insurance coverage and coverage for any of the more expensive possessions you own. That way, come what may, you’ll be ready for it.
Assign Power of Attorney
With so many of us living so much longer than we did in the past, more of us are unfortunately being struck down with serious illnesses like Alzheimer’s, which can leave us incapable of looking after our own affairs. The last thing we want, should this happen, is for us to make bad decisions or be ripped off by unscrupulous people, just because we are ill. One way of decreasing significantly the chances of that happening is assigning power of attorney to a trusted relative. Just make sure you use good power of attorney solicitors to do this so that it’s all official. You should also, of course, be very careful about who you choose to give power of attorney to and ensure that they can only take control when it has been medically proven that you can’t take control of your finances for yourself.
Prepare for Acts of God
If you live in an area where natural disasters aren’t exactly unheard of, then it’s important that you prepare yourself and your home for them. If, for example, you live in an area that is known for its hurricanes, read up and learn everything you can about hurricanes, stock up on emergency supplies and modify your home so that it is less likely to be seriously damaged by the weather should it hit.
Create a Fall-Back Budget
Even if you already have a budget, you’ve built a strong emergency fund, and you seem to be doing well, it might not be a bad idea to create a fall-back budget. This is a budget that lays out a plan for you to live as well as possible should you become unemployed or lose a portion of your income for whatever reason. By already having something like this in place, you can relax a little and worry less about life doing what it does and throwing surprises your way.
If you utilize as many of these ideas as you can, then although you’ll probably be stunned by a few unexpected twists and turns in your life, financially at least, you should be able to deal with them with a clear head and far less worry than your peers might expect to do so.
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