Car repairs and home appliance break-downs happen to everyone at some point, but there are a lot of unexpected situations that can set you and your family back financially if you’re not prepared. Think about these scenarios when considering how much you should save in your family’s emergency fund.
An unexpected trip to the hospital may not blow your budget if you have comprehensive health insurance. Still, medical emergencies often come with big-ticket costs. Prescriptions and medical equipment, such as a wheelchair, crutches, or oxygen tank may not be covered, and you won’t want to think about these expenses if you or someone in your family is dealing with a medical emergency. Think about hospital indemnity, critical illness or accident insurance coverage that may be available as voluntary benefit options through your workplace. Unlike most medical insurance, these policies pay a lump-sum directly to you, which you can use as you see fit.
If a family member or loved one has a medical emergency or passes unexpectedly, you may have to book last minute travel arrangements. You might even have to chip in for a relative's travel. Think about what it might cost to book a flight or train ticket—plus a hotel and meals—and build it into your emergency budget.
And in the event that you or your spouse passes away, have you planned for your family’s financial needs? Life insurance is an essential part of budgeting for this difficult and unexpected time. When thinking about how much life insurance you need, consider funeral arrangement costs, outstanding bills and family members who rely on your income.
Set aside some time to adjust your budget and evaluate the insurance policies that will help meet your needs. Being as prepared as you can be for the unexpected is a great way to protect and care for yourself and your family.
Severe Weather Events
Severe weather events can happen whether you live in a warm climate or a cold one. Having cash on hand to pay for needs like gas, groceries, or temporary shelter for several days will make it easier to handle weather-related disruptions. You may also want to take a closer look at your home or renters insurance policies to make sure you have the proper coverage should a storm cause damage to your property or personal belongings.