Everyone should have money saved away in the case of emergencies, and yet far too many people live paycheck to paycheck. Emergency savings are needed because life isn’t routine. You cannot only have money for the expenses you plan for – unexpected injury, job loss, death, or even property damage can all affect you. A good guide is to have money saved for expenses to last you between three-to-six months, though it depends on your specific situation. Saving for that much may seem impossible, but it can be done.
Before an emergency can occur, start to save. Do this by first understanding your spending. This means making a detailed list of everything that you buy. Once you have that list, you will be able to sort through necessities and frivolities. If you want to kick-start your savings, cut out everything except the necessities (food, utilities, rent, transportation) and put what is left in a savings account. Other options include living at home, getting a second job, or putting a set sum into savings immediately after you cash your paycheck.
In some situations, however, you might not have to touch your savings. Always opt for ways to either share in the cost or reduce the cost, and always demand compensation when it is owed to you:
In some situations, you might be able to crowdfund to acquire the financing you need. While there are some success stories about people in need getting money from strangers to make their lives better, they are the exception, not the rule. More realistic options for crowdfunding are, for example, asking friends and family to pitch in for funeral costs.
- Reductions and Discounts
If the full cost falls to you, it’s time to look at your options. Panicking is a good way to miss out on deals and discounts the government, company, or other programs have in place to help people in your situation. Sometimes, all you need to do is a little research to save money. Help can come in the form of a discount, a payment plan, or even a service that will help you get back on your feet.
- Getting Fair Compensation
Accidents are one of the worst emergencies a person can endure. The injuries sustained can put you out of work, the hospital bills can put you in debt, and your family could suffer without your support. That is why you need insurance, and, in the case the accident was not your fault, compensation. Find an accident lawyer that will fight on your behalf to get you what you are owed so that your life, and the lives of your family members, aren’t ruined because of your injuries.
Having emergency savings means you have a safety blanket in case the worst happens. Knowing how you can finance emergencies without using your savings, however, is smart. You can crowdfund to either eliminate or reduce costs, you can discount your cost or use other aid measures, and you can even get paid back all the damages done to you if the accident was not your fault. Being prepared is how you’ll get through an emergency.