Sometimes, out of nowhere financial disaster strikes, leaving you and your family in a bit of a pickle. Whether someone falls ill while abroad and you don’t have adequate health insurance to cover the cost of their treatment, your car gives up the ghost, or you receive an unexpectedly high bill, it can leave your finances in a mess.
As a parent, you are responsible for ensuring that whatever happens, you and your little ones have a roof over your heads and food on the table. That’s why it’s important that you know how you would deal with a financial disaster, so that should one occur, you are not thrown and know what steps to take to get your finances back on track.
With that in mind, below are some tips and useful pieces of advice to make planning for a financial disaster that little bit easier.
Understand what the most common causes are of financial problems
The first step to ensuring that should a financial disaster occur; you are prepared for it and able to deal with it, is understanding the most common causes of financial problems.
One of the main reasons families get into a sticky financial situation is because someone loses their job. Admittedly, when someone loses a job, it’s always going to be upsetting and stressful, but it doesn’t have to be the end of the world.
Another common cause of financial problems is a household emergency. Sometimes, something happens within our homes, such as a broken boiler, an oven that stops working, or a bath that overflows, leaving us with a high bill to pay and not enough money in the bank to cover it.
Sometimes, an accident occurs that leaves us without a car. When you’re a busy mum with school drops off to do, food shops to organise, and work to get to, a car is a must. Which means that if your car ends up damaged, for one reason or another, it can put a strain on your finances, as you need to get it fixed as soon as possible. Or, in the worst-case scenario, replace it as soon as possible.
A lack of medical insurance when traveling abroad is another common cause of financial problems for families. If you fail to take out health insurance before heading off abroad and someone falls ill, you could be looking at a bill of thousands of pounds in healthcare.
Ensure you have adequate insurance in place
The good news is that many financial disasters are avoidable. Well, the problems themselves aren’t, but the financial problems that they cause are, or at least, they can be. The key to preventing financial disasters is doing as the Boy Scouts say and always being prepared.
To ensure that you don’t end up in financial trouble if a disaster of some sort occurs, make sure that you always have adequate insurance in place. Yes, insurance policies don’t always come cheap but when you think of how much money they will save you, should disaster strike, it’s worth the cost. The question is, what insurance policies should all families have in place?
If you’re a homeowner, you should have household insurance in place that covers both the building itself and the contents inside. If you’re a renter, you should have contents insurance, covering all of the contents within your property – the landlord is responsible for insuring the building itself.
Planning a family holiday anytime soon? If the answer is yes, it’s crucial that the whole family has health insurance in place, so that should any accidents or illnesses occur while you are away, you are covered.
If you own a car, it’s important to have car insurance in place – not just third party fire and theft but full cover, so that should a car accident occur, your car is covered.
Do you have pets? If the answer is yes, it’s a good idea to insure them, as that way, should they get hit by a car or become unwell, their medical treatment will be covered.
Have a disaster plan in place
As a parent, you need to ensure that no matter what happens, you have a disaster plan in place. So that, no matter what the issue, financially you are able to cope. Part of planning for disasters is having the adequate insurance in place, as mentioned above, but there’s more to it than that.
You see, you need to have a plan in place to deal with problems that your insurance won’t cover, such as someone losing their job, for instance. So that, no matter what happens, you know that you will be able to cope.
Take yourself or your partner losing your job as an example. The best way that you can prepare for this and ensure that you are okay financially is to open a savings account and put a little money aside each month. Once you’ve saved enough money to last you for two to three months, then you can reduce the amount that you are saving each month to a lower amount. By putting aside some money to use in case of someone losing their job is a great idea, as it means that whatever happens, you don’t have to stress. Yes, you will still need to find a new job, but at least there is less pressure to do so.
Consider borrowing money
If a financial disaster occurs that you haven’t prepared for, then it may leave you feeling really stuck. However, no matter what the problem is, there’s an answer, so don’t stress about it.
Say, for example, your car has been broken into and your laptop was stolen that you need for work, and unfortunately your car insurance only covers the vehicle, not the laptop, leaving you in a pretty tight spot. You need a laptop for work, but you can’t afford to buy one right now, not with the excess to pay on your car insurance. What should you do?
One option is to ask a friend or family member if they can lend you the money that you need. Another is to consider taking out a loan, such as a Swift payday loan so that you can replace your laptop as quickly as possible. As long as you pick a loan that will allow you to make affordable repayments, then you don’t need to worry about it.
Be positive, no matter what
When you’re having money problems, for whatever reason, it’s easy to get down. However, it’s much better to try and remain positive, as that way you will feel better about the situation. They say that positive people tend to do better in life because no matter what happens, they always find the silver lining.
As a parent, no matter what’s going on, you need to stay positive for your kids. Yes, having money problems is never fun but there’s always a way to get through them, it’s just a case of finding the perfect route. So aim to always be as positive as possible, and hopefully, things will work out for you.
Being prepared for financial disaster is a must, as by being prepared you can make the impact much less severe, ensuring that family life goes on as normal. Take note of the tips and advice above, and you can make sure that no matter what is thrown at you, from redundancy to a flooded house, you know how to deal with the problem and achieve a good outcome.