Although it’s impossible to predict what will happen in life, there are certain actions you can take to better prepare you for what may come your way. Instead of worrying about things you often can’t control, consider these potential life events and what you can do now to avoid them ruining your finances in the future.
Becoming a caregiver
It’s difficult to think about our parents growing older and the possibility of becoming a caregiver to a loved one. If you’re not careful and prepared, taking on this responsibility can significantly impact your finances. The best thing you can do to prepare your family is to fully understand your loved one’s financial standing. Have they invested in long-term care? Are their finances in order and have they sought the advice of a financial planner? Don’t let any new expenses you may incur while helping out cause you unnecessary financial stress.
Getting a divorce
No one expects to get divorced when they’re reciting their marriage vows in front of family and friends. The fact is, sometimes things don’t work out and you and your spouse are better apart than together. The smart thing to do if you’re faced with this situation is to get informed now. Don’t let your soon-to-be ex control your finances. Don’t be afraid to get the help you need so you’re financially independent and stable. Experts also suggest that immediately after going through the divorce, wait before you make another serious decision. Let the dust settle, make sure your assets are in order and take things slowly. Rash decisions can cost you so take your time during the transition.
Weathering a natural disaster
We all know that Mother Nature has a mind of her own. But, there are a few things you can do to prepare your financial state in case of a weather disaster. First, start an emergency fund now. Saving a small amount initially is a wise plan but ideally you’ll want to have around four to five month’s worth of living expenses on hand. Secondly, keep your financial documents organized and secure so if disaster strikes you can easily access the information needed. Third, get up to speed on your insurance policies. Most homeowners insurance plans do not include flood damage so in the off chance you live in an area prone to high flood waters, get coverage now as flood insurance usually cannot be purchased after the disaster strikes.