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Like most Americans, you have done your research. To protect your family, you drive one of the safest vehicles on the road. You may have added a security system to your home to protect them. The kids have a curfew, you live in a safe neighborhood, and you may even live close to an emergency service station. You have done everything you can to make sure your family is safe. Yet, unexpected events can still happen.
There are affordable steps you can take to prepare yourself for unforeseen financial events that can arise. Things like medical emergencies, extreme weather disasters, and other unanticipated occurrences that can happen in life.
1. Funding Emergencies
If you listen to talk radio or watch financial news, you hear financial experts talk all the time about how American households are not saving enough money. The average household should have enough money in a savings account to cover basic expenses up to six months. These basic expenses should include:
- Vehicle payments
- Insurance payments
- Minimum debt payments
- Phone bill
- Any other necessary bills to maintain your household expenses
With costs rising faster than income, it’s difficult for people to save. Even with family members “circling the wagons” to help each other, funding a financial emergency can be a near impossible task. Setting aside a little at a time is the best way to build this fund.
2. Side Gigs
To help you save for this emergency fund, and make things more comfortable, pursuing a second part-time job may also help. When most people think of a second job, they think of some type of manual labor job at 2 AM in the harshest weather, moving manure or other unappealing items.
In the age of the internet, there are many side jobs out there you can do from the comfort of your laptop and a recliner. A quick web search can give you a long list of sites that recommend how you can earn extra income from home. Many companies are looking for part-time freelancers or independent contractors that can work flexible hours outside the 9 to 5 hours to support their businesses. While the kids are doing their homework, why not take advantage of that time by earning a little extra for the family in your five zone massage recliner?
3. Health Insurance
Medical costs are big expenses. Without coverage, U.S. families have had difficulty getting the care they need due to financial constraints. The Affordable Care Act (ACA) has made progress in making health care affordable. Even the most basic coverage can mean the difference between having to consider taking out a second mortgage to cover a medical expense.
If your employer does not offer health coverage, and the ACA does not have anything that you can afford, you may want to look into other healthcare sharing programs that are out there.
4. Life Insurance
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Life insurance is not just for covering funerals. It can provide income for your family’s future. In some cases, it can also fund end of life care for late stage diseases when expenses are the highest. Experts recommend that you should cover yourself up to 10-15 times the amount of your annual salary depending on your financial situation.
Ty Stewart from Simple Life Insure explains that all life insurance companies actually have the same rates. The trick to getting a low rate is to find a company that sees your circumstances in the best possible light.
If you are worried about your health issues, Ty also explains that there are many life insurance companies that write policies up to $500,000 that do not require medical exams.
Even though most life insurance companies look at your credit history, it does not disqualify you from getting affordable life insurance. Companies that write policies use other relevant factors to determine price quotes that focus on your medical history and other more direct elements. Your credit history may play a minor role in determining your price quote.
Some states ban insurance companies from using credit reports when determining policies, so be sure to talk to your chosen insurance agent to discuss how this could affect you
5. Disability Insurance
Disability is a scary concern for many Americans. In 2019, up to 1 in 4 Americans are currently disabled. Many employers offer short-term and/or long-term disability to their employees as part of their benefits package. If your employer does not, you may want to consider looking into this protection.
Short-Term Disability is an insurance policy that covers a person up to one year. If you are unable to work for a period between one month to one year, you can receive income from this policy while you are recovering. These policies may also protect your job while you are away from work.
Long-Term Disability covers a person for permanent disabilities up to the age of 65. It’s important to know the payout conditions for this, as every policy is different. There are policies that will pay you if you are unable to currently work, while there are others that will require you to take up any type of job you are capable of doing despite your disability. So it’s important to read the fine print. This is also aside from your Social Security Disability benefit, but the two may work in tandem.
If you think back to your own childhood, you may think that your parents or grandparents had it easier when they were taking care of their families. They did not have to deal with these various types of insurances and protections. The truth of the matter is that some of these programs did not exist. As a result, those that did suffer from disabilities or experienced disasters ended up losing everything they worked for. As a result, they may have had to work in their retirement years or moving in with their adult children.
With the strategies discussed above, you can save your family from the burdens of unexpected financial disasters. You will also have peace of mind that there are a number of plans in place for the unforeseen.