Even when the picture is rosy, and the future is bright, life has a habit of throwing the odd curveball. If you’re sailing along nicely now, unfortunately, there’s no guarantee that an iceberg won’t pop up from nowhere and threaten to sink your ship. While the unpredictability of life can be exhilarating, it can also leave us at the mercy of the unknown. Often, bolts out of the blue affect our finances, and this is why it’s so beneficial to have an emergency fund. If you don’t already have an SOS savings pot, here are some of the most common reasons why you may need one.
Common financial curveballs
You may think that you’re in a stable financial situation now, but would you be able to cope if you needed money suddenly, or you couldn’t rely on a regular income anymore? Accidents, illness, damage to property and possessions and losing your job can all have a significant impact on your finances, especially if you haven’t got a nest-egg you can rely on to see you through tough times.
You may think you’re a careful driver, but you’ve probably noticed that not everyone is quite so diligent, patient and cautious on the road. In fact, 2 million people are injured in road accidents every year in the US, and more than 90 percent of crashes are caused by driver error. If you’ve been injured in an accident, this can affect your income, you may incur medical costs, and you might also have to factor in the cost of vehicle recovery or repairs. If you find yourself in this situation, it’s always wise to seek legal help, especially if you were not at fault. At Berkowitz & Myer, the team offers advice for those who have been injured as a result of the negligence of others. If you make a successful claim, you could end up with a payment that will cover health costs and lost earnings if you’ve taken time off or had to give up working altogether.
Our health is something we can never take for granted. You might look and feel fine, but sometimes, your health can deteriorate quickly and unexpectedly. If you’ve been struggling with illness, this can take its toll on your bank balance. If you are unable to work or you’ve had to leave a job because you’re unable to cope with the nature of day to day tasks, look around for openings that are more suited to you, and seek assistance. If you can’t work due to illness, you may be able to claim benefits.
Damaged property and possessions
If your home has been burgled or damaged in a storm, or your car has suddenly started making squealing or grinding noises, you may need money quickly. Your home insurance should cover the cost of repairs or replacing lost or damaged items, but it can take time to process claims. If you need a place to stay while work is carried out, or you need cash quickly to fix your car, explore your options. It may be possible to borrow money from a friend or relative until payday, or you could talk to your boss and ask for an advance. Some insurance providers will offer assistance with temporary accommodation, so check the details of your policy.
If life threw you a curveball, would you be able to cope? If the answer is no, why not start putting a little money aside and set up an emergency fund?