How to Prepare For Difficult Financial Scenarios

2018-11-28T11:25:38+00:00

Being prepared for changes to your personal situation is the best way to avoid financial complications as life takes its course. You could find yourself in any number of situations that require expenditure that you were not expecting to make, and on these occurrences, you will want to have a rainy day fund or assistance from professionals arranged and researched in advance. Here we are going to take a look at some the ways you can do that.

Unemployment

Despite unemployment being at a 49-year low, if you are currently employed sudden redundancy is likely to be one your greatest fears. And with good reason. The media is full of reports about dramatic moves to automation and industries are changing. However, unemployment doesn’t have to come from a big change in your company. It can be cost saving exercises which affects small numbers of employees so being prepared no matter what is a good thing to be.

Some of the advice that you should take heed of if losing your job is a primary concern is as follows. For starters, make sure you are currently saving an emergency fund. You should have at least six months of living expenses saved regardless of your job security. However, bear in mind that if you do lose your job, you will likely need to make changes to your lifestyle so that six months may be able to stretch further.

If you do find yourself on a lower income suddenly or out of full-time work, explore some of the alternative employment opportunities available to you. While technology is causing concern for some industries, it is also creating options for people who need to make some extra cash. Exploring the gig economy and e-commerce will be a quick way to supplement your savings or tide you over until you can back yourself into employment.

However, losing your job isn’t just about the bottom line earnings. You will likely have been getting benefits in your contracted position and you will now be concerned about how to cover expenses like healthcare.

Healthcare

Your health really isn’t bothered about how well you are doing at work or if you’re financially struggling. Illness and disease are indiscriminate, and while the chances can be increased by a lower standard of living that doesn’t mean you are immune if you are financially comfortable.

As discussed above, you can suddenly find yourself without benefits which is the way almost half of Americans pay for their healthcare according to the United States Census Bureau. That means losing your job can have serious repercussions on your ability to pay for medical help should it be required.

However, you shouldn’t fear because there are options available to you although they may require you to dip into the aforementioned emergency fund. According to this government website, your options include buying a health plan through the Marketplace for which you will have a special enrollment period should you find yourself unemployed. Alternatively, they suggest that you can get health coverage through COBRA. This is a federal law that may let you pay to stay on your employee health insurance for a limited period of time.

These are just two options available to you, and an obvious third is to use your savings and any supplemental income discussed previously to sign up for private insurance. Though you might want to consider temporary measures before doing that in case a full-time role with benefits comes up sooner rather than later.

But losing your job isn’t the only way that you can find yourself in financial difficulty. One of the things we all look forward to in life can actually be quite straining on your bank account. That is retirement.

Retirement

The current full benefit retirement age in the US is 66, but that is rising to 67 for those born after 1960 in the next couple of years. Early retirement benefits are currently 62, and they will continue to be so but at a reduced rate with the changes outlined previously.

Taking into account the age you are going to be when you retire, that means you will quite possibly have been working for between 40 and 50 years. In that time you should have been contributing to a pension scheme and building a personal retirement fund at home. However, there are unexpected costs that can occur in retirement which will have a difficult effect on your pension and savings.

Preparing for eventualities like the death of a partner are incredibly difficult, but they are necessary. For both parties. It may very well be an uncomfortable conversation, but there are taxes, loss of income and other financial issues associated with death that you might not have considered before now.

One thing to consider, is how are you going to pay for healthcare? For example, it estimated that a retired couple in the US would need hundreds of thousands of dollars to cover 20 years of health costs out of their own pocket. So utilizing services that offer you medical coverage into your pension years is a must, and is something to research thoroughly in advance of the day you hang up your working hat.

Other

Unfortunately, there are other ways people find themselves in financial difficulties, but once again if you understand services that are out there to help you, you will be better off. For example, if you find yourself in unexpected trouble with law enforcement, then a bail bond agency like https://www.amistadbailbonds.com/concord/ will be able to assist you. Or if repayments on your home have become difficult, look into then looking into schemes that provide you with assistance could just give you the breathing room you need.

Finance is a difficult subject to navigate, but taking the time to do your research into how to provide yourself and your family with security will give you peace of mind for any number of situations that could arise in the future.

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