Preparation is Key!
By Shay Cook, MS, AFC®, FINRA Investor Education Foundation
September is National Preparedness Month, and it is a great time to prepare for a potential natural or financial disaster. You never know when a hurricane, tornado, earthquake or volcanic eruption may disrupt your life. Disruptions can also occur in the form of an unexpected financial torpedo.
I have helped many clients over the years who had to rely on their credit cards and payday lenders to repair an air conditioner, replace car brakes or fly home to be with a loved one who is in the hospital. After they get the item repaired or replaced, or come back from being with that loved one, they face a large amount of debt and no extra money in the budget to pay if off. All too often, the new debt leads to more late or unpaid bills and ultimately, a decreasing credit score.
With a little pre-planning, you and your family can avoid this fate! When you prepare ahead for emergencies, you can avoid debt overload and damage to your credit.
- First and foremost, start or build your emergency savings fund well before you need it.
- You should also check to make sure you are covered with the right amount and types of insurance (e.g., auto, health, property, life, pet, etc.).
- Don’t forget to put together a financial emergency kit to include identification, cash and keys, important contacts, copies of key financial records and an inventory of your valuables or personal belongings. Your kit should also include medical and insurance documents. While you can't guarantee that your kit will survive a disaster, you should keep it in an easily accessible—and easy to remember—location so you can access it quickly during an emergency.
Having emergency savings readily available and your financial emergency kit fully stocked can keep you from reaching for that credit card when the unexpected inevitably happens.
If you’ve already found yourself falling into debt, make a plan to dig yourself out. You may also want to talk to your local Personal Financial Manager/Financial Counselor or a nonprofit debt counseling service like a member of the National Foundation of Credit Counseling.
Let Military Saves help you save money so you can feel confident about your finances. It all starts when you make a commitment to yourself to save. Take the first step today and take the Military Saves pledge to save money, reduce debt, and build wealth over time. And it doesn't stop there. Military Saves will keep you motivated with information, advice, tips, and reminders to help you reach your goal. Think of us as your own personal support system.
Check out these tips from @FINRAFoundation on how you can prepare for emergencies like a flat tire, or natural disasters like #HurricaneFlorence. v/ @MilitarySaves! http://bit.ly/2QMOIig
- Written by Guest Blogger
- Category: Blog
- Published: 20 September 2018