For people who live paycheck to paycheck, the chance of a serious financial problem wreaking havoc on their lives is high. Families who haven’t prepared for the worst may be the ones who are most impacted by a sudden costly expense or change in life. A big change in life could make your financial goals much harder to reach, so it’s best to take steps now to prepare for the worst. Here are five potential devastating financial situations to think about and what to do to help your family survive.
1. Job Loss
The biggest financial worry that many people with families have is an unexpected job loss. While the economy is strong right now and the job market is healthy, some industries aren’t so lucky. Many employees could be fired without advance notice or reason, which means it’s essential to plan ahead. One way to survive a sudden loss of employment is to have an emergency fund ready to go. Over time, prepare by saving up at least six months’ worth of your regular living expenses. This way, if you find yourself unemployed, you can get by temporarily.
Another big financial issue that your family could face is a serious illness. Long-term devastating illnesses such as cancer can be tough on your wallet.
If someone in your family is diagnosed with a serious illness, it can impact more than just everyone’s emotions. Suffering from an illness or taking care of a loved one with an illness means lots of missed time at work and potential salary cuts. You can help your family survive a difficult illness by checking out different types of short-term disability insurance plans.
Many happily married couples don’t want to consider the possibility of divorce later down the road. Unfortunately, divorce is still an issue that all couples should talk about before getting married. When a family splits up, it can be one of the worst things to happen to your finances. Divorce can be costly and can have serious financial consequences. Before marrying, make sure you have a plan for a possible split and work together to manage your finances amicably.
When someone in the family dies, it can also affect your finances. Grief can make it difficult for survivors to be productive in their work. The loss of income from the death of a spouse can put even more strain on a family’s budget. To make a difficult time like this less stressful, it’s best to purchase a life insurance policy. Talk to your local insurance agent for more information.
5. Natural Disaster
Finally, the last big life event that could change your financial situation is a natural disaster. A hurricane, tornado, flood, earthquake, or fire could shake up your family’s entire world. Families that survive natural disasters like these are often left with destroyed homes and virtually no belongings. If you live in an area that is at risk for disaster, make sure you have a strong homeowners insurance plan to protect you and your family from financial ruin.
There are several ways you can protect your finances from being wiped out due to major life events. Be aware of your risk for each event and plan ahead to give your family the best future.