How to Prepare for a Financial Emergency
While you can’t predict emergencies by their very nature, there are certain things you can do to prepare for if and when one comes your way. Financial emergencies are actually easier to prepare for than you might think. While you might not know when they’ll happen or how much money you’ll need to handle them, you can be adequately prepared as long as you start now and stick to it.
Creating an Emergency Fund
Emergency funds can be used for any true financial emergency. The more you have, the more prepared you’ll be, but experts recommend saving up about six months’ worth of living expenses in your emergency fund. This should give you enough of a cushion in the event that you lose your job or become injured or ill and cannot work.
Living Below Your Means
Spending less than you make is the key ingredient in building wealth and that includes saving for an emergency. If you spend 100% of what you make, losing your income will hurt you worse than if you only spent 50% of your income. Using a budget is a great way to see where your money is going and if you really need to be spending as much as you might be.
Being Covered by Insurance
You never know what life has in store, but insurance can help you prepare for the worst. Disability insurance can cover your income and a life insurance policy is recommended for couples who are dependent on one another’s income. Check with GCS Credit Union to find out the best insurance options for you.
Having a six-month emergency fund, spending less than you make, and having insurance just in case are just a few ways to prepare for a financial emergency. GCS Credit Union has a variety of financial products and services designed to help you save money and prepare for your future. Give us a call today at (618) 797-7993 to learn more.