Staying on Track During a Financial Crisis
Posted by Jim Peters at June 28th, 2013
Unfortunately, life isn’t always a bed of roses. The financial thorns of life have a way of sticking you at the worst possible time. Whether it is an unexpected medical bill, loss of a job, or home and automotive repairs, unexpected occurrences will rarely coincide with your financial plan.
During these times, you will discover that the best way to handle unexpected expenses is to plan for them. The following tips are designed to help you stay on track even in financial crisis.
Keep a rainy day fund.
Whether you have a savings account, money market account, or tin can, this fund was created to handle financial emergencies. More importantly, this emergency fund will prevent you from withdrawing costly money from retirement accounts or your child’s education fund.
Insurance is the key.
Proper insurance will allow you to leave your rainy day fund intact for another day. Insurance offers protection against the most disastrous financial mishaps, and a few of the most common types are listed below:
- Employers do not always provide health insurance. In this case, you should research private health insurance to protect you from unexpected health related costs.
- Disability insurance provides financial assistance in the event you can no longer work. While Social Security Disability and Work Compensation insurance may be available, they are rarely sufficient. Your employer may even offer some type of disability insurance, but it should be supplemented with private disability insurance to meet your family’s financial needs.
- Renters insurance is usually overlooked, but the contents of your home will never be forgotten in the event of a fire or burglary. In addition, since it is your apartment, you may be held financially liable for any accidents that happen to guests.
- Umbrella insurance offers protection from lawsuits.
- Life insurance offers your surviving spouse and family financial protection in the event of your death.
- Long-term care can be vital in paying for nursing home or in-home long-term care.
Borrow with guidance.
Borrowing should be done wisely with the lowest cost of funds.
Sell your investments carefully.
Selling investments should begin with the taxable instruments, avoiding retirement accounts because of additional taxation.
About The Author
Jim Peters is the Owner of Centaurus Financial Inc., which is a team of highly qualified financial planning and retirement financial advisor based in Irvine, California. As a financial planning and wealth management firm, Centaurus Financial Inc. offers a wide range of services and products for both individuals and business owners, helping their clients pursue and reach their financial goals.