Life doesn’t always go as expected, especially when finances are involved. A financial emergency can feel like the end of the world. But a little bit of preparing now can take a lot of that negativity away. It may seem challenging to get started planning for unexpected events. So while you cannot plan for every specific event, a few precautions now can turn a financial emergency into a financial hiccup.

Emergency fund

First and foremost, create an emergency fund for you and your family. This fund should include at least 3 to 6 months of living expenses, but up to a year is best. It should also be liquid and separate from other savings accounts. Having this cushion in case of job loss or injury, or sickness can turn a terrible situation into something you have time to figure out.

Power of attorney

Make sure you have a trusted healthcare power of attorney in case something happens to you. It is also wise to make sure your spouse and adult children are set up with a POA too. It seems like a scary, far-off thing to think about, but anything can happen. And if a healthcare POA is needed in you or your family’s lives, it is better to have planned for it rather than not.

Insurance

Ensuring you have adequate insurance can be the difference between mind-blowing debt and feeling good about your finances during an emergency. So do make sure you have adequate and updated health, house, car, and life insurance if there is an unexpected event or expense.

Will

A will is a topic that brings up one’s death. And again this is something that no one likes to think about, which in many cases leads to procrastination when creating a will. But making a will can help us prepare for the inevitable.  It also ensures us that our assets will go to the beneficiaries of our choice. It may help you have a piece of mind as you move forward in life.  And make sure all other adults with assets or dependents in your family do the same. Then, in case of an unexpected death or accident, you and your family will be prepared to deal with the next steps.

While no one likes a financial emergency, they don’t all have to be detrimental to your financial wellbeing. Preparing yourself for life’s financial emergencies with these simple tips can make all of the difference. Contact your financial advisor to get started on the process today.