Most of us have a plan for our future: whether that’s having a salad for lunch, a vacation in Florida over the winter break or retiring in the country. These are dreams that we enable by creating opportunities to execute them. This can mean getting an education for that job you’ve always wanted, saving money for the down payment on the perfect home, or putting in hours of practise into your passion, whether it be judo, woodworking, or quilting.
However, life can always throw us a curve ball. We might know this well from our own experiences or from that of our friends or colleagues. Though the chances that something unplanned will happen in our lifetime is overwhelmingly large, most of us pretend like the odds are next to nothing. This can result in a huge problem when something does arise and we hadn’t planned for it because we didn’t want to. We can’t always keep surprises from happening, but what we can do is be more resilient to them by having an emergency nest egg available to deal with it.
If you still think that you are invincible and that life always goes your way, consider the following “surprise cards” life can deal us.
- Job Loss
For the vast majority of us, our main source of income is from our jobs. We work to support ourselves and our families, using the money for food, shelter, health, and then other items and services we want like trips, hobbies, clothes, etc. Most of us make financial decisions based on the assumption that we are employed in the place we are currently working. What would happen if you unexpectedly lost your job? This is a reality many of us faced in the 2008 recession. How would you pay your mortgage? How would you pay your bills? This is when having a few months’ worth of savings is a god-send, but online loans could provide you with a cash advance when you need it most.
- Illness or Death
In this situation we are referring to illness or death in the family. Do you have some savings with which you could contribute to uncovered therapy? Would you be able to take an unpaid leave of absence from work? Are you ready to cover the costs of a funeral? The tragedy of the situation is enough to break a person, and being in rough financial shape just makes it that much worse. Every family at one point or another will be touched by illness and death, however, the when it arises, it always does seem like a surprise.
Though the expansion of the family is often a reason to celebrate, for others it can be a reason to panic, especially if you are not financially capable to take care of this new life. Unplanned pregnancy has happened to many of us, and it’s something that is wise to plan financially for, especially if you are sexually active. Remember that raising a child is a long term commitment, so it might even be worth creating an investment fund from which you can use the dividends towards child-related expenses.
These three popular “surprises” happen to the majority of the population at one point or another. It’s best to face the fact that you will be there one day too, and start preparing for it financially, just as you would for the purchase of your cabin in the woods, or that new iPad. Not only will this save you from racking up a humongous debt down the road, it will give you peace of mind. In this case, ignorance isn’t bliss; it’s ugly.