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How to Prepare for a Financial Setback

Photo Credit: https://pixabay.com/en/shopping-spending-till-slip-879498/

Raising a family is never easy, even when times are good.  As a parent, you always worry about the wellbeing of your kids and then there are the never-ending concerns about money.  This can come to a boiling point when you or your partner faces a financial setback.

Unfortunately, it’s not like many setbacks comes with advance notice as they usually happen when you least expect them to happy. With that in mind, here are some tips on how to prepare for a financial setback.

  • You Need a Plan

By their very nature, setbacks come when they are least expected.  You could be on a business trip to Southern California when you are involved in an accident.  In that case, you will not only have to deal with the medical expenses while away from home, but you will also need to figure out how to get yourself back home.  As such, you might want to check out this link for one of the largest personal injury firms in sunny California – https://westcoasttriallawyers.com/.

You get the point, setbacks can happen at any time.  So, the question is not how to avoid them – it is impossible to avoid the unknown.  Rather the question is how to be prepared for them and this means having a plan.

How can you plan for the unknown?  Well, it’s not so much about planning for a specific setback; rather you want to make sure your family is prepared to withstand whatever comes its way.  This means setting up an emergency fund, making sure you have the right kinds of insurance, and even having emergency contacts in a central place when needed.

As for the latter, you might also want to consider keeping hard copy records of some of your most important accounts.  While you could keep these in a safe at your house, it’s probably better to keep them in a safety deposit.  Just make sure you and your partner can access the records if needed.

Beyond this, you might also want to plan for what would happen to your kids if something were to happen.  It doesn’t matter if it’s just a few days or something long term.

  • Have a Budget

Another way to be prepared for a financial setback is to have a budget in place. While you might be thinking that this won’t help, the reality is that having a budget and sticking to it will allow you to develop the financial discipline needed to overcome anything.

For starters, having a budget will help you to control your income and expenses and this is a key step to setting up an emergency fund.  Then there is the fact that having a budget will help you to know where to cut back when the time is needed.

Lastly, having a budget will get you into the habit of keeping tabs on everything you spend, and this means no more situations where you wonder where all your money has gone.

 Become a Saver

While penny-pinching might have become passé, the truth is that being a saver can go a long way in helping you protect your family.  Granted, some people might take this too far, but if you can save money and help your family, then why shouldn’t you?

As mentioned, you will want to set up an emergency fund to protect your family.  But you also want to look at how you are spending your money and question whether it is necessary and if there is a way you can save money.

Start with things that will have the biggest impact, like your grocery shopping or clothes for your kids.  Coupons are a great way to save money at the supermarket, but you can also set up a small garden in your backyard and this might help your family save money on fruits and vegetables.

When it comes to clothes for your kids, learn to love to hand me downs.  Maybe you can share with your friends who also have kids, or it just by passing on clothes from one child to another.  Let’s face it, children’s clothing is expensive, and, in many cases, they don’t wear them for more than six months at a time.  As such, it only makes sense to find ways to save a little here and there.

 

Comments

  1. Mary Ambrosino says:

    All great advice. Especially the saving part because it doesn’t matter how little as long as it is something. You can always increase the amount later.

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