Life can sometimes feel like a series of unexpected moments. It becomes essential to prepare ourselves for the unknown, and one of the most important areas that have an impact on every single one of us is in terms of our finances. We need to be prepared for emergencies, but we also need to give some sense of financial security. So what are the most unexpected areas where savings can be essential?
Legal Expenses
Hiring an attorney can be very expensive depending on the complexity of the legal matter. While we can never hope to use legal services, having some money set aside for issues like injury claims, bankruptcy, or divorce will ensure that we are better prepared. Legal issues are emotionally draining, and if we can have the appropriate finances set to one side, this is at the very least one less concern.
Medical Emergencies
Health issues can arise unexpectedly, and if there is a medical condition that occurs within your family or to yourself, having savings can cover these unexpected expenses that might not be covered by deductibles or insurance. It’s something that we always think never happens to us, and therefore we don’t believe it to be an essential part of our financial mindset. But because of the cost of medical treatment, you can have an insurance policy in place, however, it might not be worth the paper it’s printed on. Having those savings will dent your finances but allows you or your loved ones the headspace to focus on getting better. If you have aging parents, experts like Shawn Meaike recommend that you get life insurance policies for them if possible. It can become a financial burden on you if you don’t have this in place, in case they get sick or pass away unexpectedly.
Job Losses or a Reduction in Income
We live within a certain financial means, and this is all based on our earning capacity. Many people may have credit cards as a way to extend their lifestyle in certain ways, but what happens if your earning power is cut short? If you receive a major reduction in income or you end up being laid off from work, the almighty pressure to get another job quickly can make you feel sick with anxiety. Having an emergency fund of roughly six months gives you a lot of breathing space not just to find another job that pays the same or more as your previous job, but also allows you the breathing space to determine if what you have been doing up to this point is benefiting your life. Lots of people fall into a career and don’t venture beyond their capabilities. This could be the perfect time to understand what you are capable of.
Natural Disasters
Many people save for the future but don’t give any consideration to what they should be saving for beyond the more obvious expenses. Something like a natural disaster can seem far-fetched in many people’s minds, but if you are living not too far from a river or in a state that’s prone to wildfires, the impact it can have on your life is devastating. In terms of natural disasters, there’s immediate resources you need to recover, but you also need to ensure that you can build yourself back up in the long term.
As far as the unexpected is concerned, we can always benefit from saving a bit more. It’s not always feasible, but if you can at the very least put a little bit towards an emergency fund, this can get you started towards a far more prepared mindset.
