3 Important Reasons to Plan for Unexpected Emergencies
Life is an unpredictable, beautiful, chaotic mess.
Okay, it’s tough to argue that life is beautiful when emergencies spring up and demand that you empty your bank account to find a resolution. Here are three good reasons you need to anticipate these problems before they arise.
1. You can’t make decisions under pressure
Planning for life’s unexpected emergencies guarantees you’ll have a strategy in place when things get crazy. This is why businesses rehearse fire drills and why expecting parents map out their route to the hospital: When stress kicks in, we humans enter “fight or flight” mode and become notoriously poor decision-makers. This concept applies to financial emergencies as much as to other ones.
2. Loans are not always available
Failing to plan for financial emergencies like car repairs or weather-induced damages to your home likely means that you won’t have money available to make things right.
Of course, people in these situations often turn to loans to get them out of the jam, but what happens when you need your car today? Or when you have water dripping through your roof and ruining your home? Loans take time to secure and aren’t always an option when disaster strikes. Having money set aside lets you react instantly to whatever problems arise.
3. Loan terms are not always ideal
Loan terms are not usually ideal for people who are already strapped for cash. When you take out a loan, you’re spending tomorrow’s money today. This isn’t always avoidable, but it’s also the main reason so many Americans are in debt. Add in the high interest rates that low-quality lenders offer and those who take out loans can find themselves in a worse financial situation than they were in before.
Plan for the Future
You can’t anticipate every emergency, but you can set yourself up financially to help you weather the storm when it comes. Set aside money each month for an emergency fund as a first step in safeguarding yourself against the unexpected challenges that life throws your way.
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