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Financially Preparing For Disasters

Life is full of potential disasters ranging from medical emergencies to property damage to being the victim of a crime. As well as being traumatic, these events can often be expensive, which can further add to the stress. Financially preparing for disasters could help to reduce the stress and allow you to make a swifter recovery. Here are just a few ways to financially prepare for disasters.

Start a rainy day fund

Everyone can benefit from having a rainy day fund – this is a savings account set aside to pay for emergencies. By putting money in a high interest savings account, you can help to accumulate money in this account faster. It’s worth always keeping a couple thousand dollars in this account and topping up as fast as you can after withdrawing. Make sure to only use this account if it truly is an emergency – many people who start emergency savings often find themselves dipping in when low on cash, but you should try your hardest to avoid this temptation.

Insure yourself

For those that don’t have the willpower to save, insurance can be another option. By paying a small amount each month, an insurer will then pay the costs of any disaster. Different insurance schemes cover different disasters – some of the most common optional schemes that people take out include health insurance, home insurance and life insurance. It’s worth using insurance broker to compare rates and find the best deal. In some cases, you may be able to bundle different insurance schemes – this could be easier to keep track of than lots of different individual schemes.

Pixabay – CCO License

Keep a good credit score

A good credit score could help you if you need to take out a loan in a hurry. Whilst bad credit emergency loans do exist, they tend to have very high interest rates and other strict penalties. With a good credit score, you may be able to access low interest loans with more flexible payment options. Your credit score is largely affected by how well you keep on top of regular payments such as bills, rent and debt repayments – try to pay off as many payments as you can on time and you’ll keep a good credit score.

Invest in preventative measures

You may be able to avoid disasters from happening in the first place by investing in preventative measures. This could involve installing a burglar alarm to prevent burglary or taking an advanced driving course to become a better driver and decrease the chance of accidents. The preventative measures could also help to lower your insurance. There may also be preventative repairs that you can make to save money in the long run. By getting a toothache seen to early or fixing a hole in your roof, you can save further damage from occurring and often save money.

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