4 Ways to Plan for the Unexpected
Most people when planning for the future tend to think of the inevitable events such as retirement or death. However there are many unexpected things that can happen that we also need to plan for such as unexpected illnesses or losing a job.
Planning for the unexpected allows us to mitigate some of the effect of those events on our finances in the short term and possibly even in the longer term. Here are 4 ways in which you can plan for the unexpected
- Establish an Emergency Savings Fund: To make sure you're financially covered if you lose a job, are involved in a car accident or need to do a major home repair, it's a good idea to have between three to six months’ worth of household expenses saved as an ‘emergency fund’
- Protect Your Income and Your Life: Put the appropriate Insurances in place to ensure that you are covered for a range of unexpected events. By insurances I mean General insurances such as car, home as well as health insurances to Personal insurances which include Life, Specified Illness and Income Insurance.
- Estate Planning: This involves making a will, nominating guardians for your children and establishing a Power of Attorney (which allows you to nominate someone to make medical and financial decisions for you if you are unable to).
- Share your Plans with Your Loved Ones: Tell your loved ones of the provisions you have made such as the insurances you have purchased or through your will. By sharing your plans you can alleviate any worries they may have and avoid any uncertainty or questioning around the decisions you have made.