How to Prepare for a Financial Emergency

Financial emergencies are always just around the corner, no matter how well-prepared you think you may be. Perhaps an accident can put the primary earner out of commission, or a natural disaster could leave you with nothing. You never know what can happen, so it pays to be prepared for any financial emergencies.

But how can you prepare?

Hire a Lawyer

If you get into an accident in San Diego, you’ll need good San Diego accident lawyers to represent you. If you get fired, you’ll need a wrongful termination lawyer to help you. There are many situations when a lawyer will come in handy, and having a good lawyer to call will be like an insurance policy. Find a lawyer that you can trust, and have their number handy in case anything should happen.

Create an Emergency Reserve Fund

You don’t want the worst to happen, but it’s important that you’re prepared for anything. You should set aside a percentage of your income every month, and keep it in a special bank account that you can only access in case of an emergency. Never touch this emergency fund for anything other than a serious emergency, as you never know when you’ll need it for something big.

Have Documents Handy

It’s important that you collect all of your important legal documents, and have them all in one place. Should you find yourself in a flood or fire, you may have to run out of your house in seconds. You’ll want to be able to take your documents with you, or keep them in a place that you know they’ll be safe. Keeping your home’s title deed, insurance papers, and inventory of valuables safe is important, and the same goes for all of your medical, car, academic, banking, and personal paperwork. Either store the documents in a grab bag that you can take with you immediately in case of an emergency, or store them in a safe that will be fire and flood resistant.

Get Your Insurance Updated

Your home insurance will cover repairs should anything happen to your home, but is it up to date? Make sure to check your insurance policy, and see if you need to expand your coverage to include valuables and other items that may not be currently protected by the insurance. You don’t want to find yourself having to cover the cost of expensive items in case of a financial emergency, just because you forgot to keep your insurance policy updated.

Keep Your Credit Score Good

Buying items on credit is something that you should try to avoid at all costs, but you will need to use your credit card in order to build up a good credit score. Use the credit card for items that you have the money to cover, such as meals out, your home bills, car payments, etc. Always pay off your card on time, and keep your credit score impeccable. Should you find yourself in need of money in case of a financial emergency, a credit card and good credit score will come in handy.

Consider a Second Income

If you are serious about preparing for a financial emergency, it may be a good idea to look into a second income. Even if one of you has a job that more than adequately provides for all of your family’s needs, there is no guarantee that they will have that job for the rest of their life. If only one of you works, the stay at home parent should look into getting a job or supplementing the income.

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