A financial contingency plan is where you create a course of action that will allow you to attain or allocate resources when a financial crisis or emergency arises. Even the best laid financial plan can fall apart if there is not sufficient preparation for the unexpected.
The following are a few circumstances that might require you to activate your contingency plan.
In This Post:
Responding to Unexpected Home Damage
For most people, their home is their largest investment. It is a haven of security that they see both as an investment and as a place to live and raise their family. Unfortunately, unforeseen home damage can occur when there are natural disasters or acts of vandalism.
Some home damage can wait to be repaired. Other things, like a large hole in the roof or damage to one of the exterior walls, may require immediate repair. Some opt to use the equity in their home to get an equity line of credit for the repair. Others may turn to a bank or financial institution to get a personal loan. Part of having a contingency plan means having money saved up or the proper insurance to cover financial what-ifs that affect their home.
Money for the Financial Expenses of a Funeral
Most people are uncomfortable thinking about their own death or their loved ones dying. However, when unexpected deaths occur, they can take an emotional and financial toll on an unprepared family. In the United States funeral arrangements and burial arrangements can cost into the tens of thousands of dollars.
Life insurance and funeral insurance are some options that savvy individuals use to cover the expenses related to a funeral. If life insurance was not purchased, a person may opt to use a personal loan to cover the loved one's final costs. However, it is always better to plan for these eventualities to protect your family from unwanted financial hardship.
Money to Pay for Medical Expenses
Medical expenses always seem to arrive at an inopportune time. Unexpected emergency dental work or surgery can set a person back hundreds, if not thousands, of dollars. You cannot put emergency medical expenses off until tomorrow, but sometimes they are just too large to cover with your savings account.
In these instances, it can be helpful to know about alternative financing options, like borrowing from family or friends, or looking into fast cash loans online with fast application processes. Note that these loans should only be considered when a person is facing an unexpected emergency and have no other recourse to turn to, but might help them get back on track in a short-term financial pinch. When there is a medical emergency, having access to fast cash can take some stress out of an already stressful situation. It can allow you to focus on getting better or helping your loved one who has had the medical emergency.
It’s important to remember that although these loans can help at the moment the emergency arises, the money still needs to be paid off. It’s important to create a concrete plan for repaying the money in a timely manner.
It’s impossible to cover all the circumstances that may require an emergency contingency plan. Your vehicle may break down, or you may need to buy a car today to keep your employment. You may be on a vacation and a medical emergency or legal emergency arises and you need cash to cover that emergency. Having a contingency plan can protect you and your family when unforeseen emergency situations arise.