This weekend the challenge is to get prepared for emergencies. There are several different types of emergencies that you may face, but it is not difficult to have specific things in place to face most of the emergencies that you will have to deal with. These life emergencies could be health related, job or money related or caused by nature. This easy challenge should prepare you to be able to cope with these challenges. Nearly every type of emergency affects your finances somehow. By having a plan in place you can save money and have peace of mind when you face the difficult situations.
1. Financial Emergencies
An emergency fund of one or two thousand dollars should be enough to cover any deductibles or car repairs that you may need to pay for. If you have paid off all of your debt or if you feel that you job is not secure you should begin to build a larger emergency fund. It should cover six months of your expenses. You can put your emergency fund in a money market account or a CD ladder. You can also create a spending plan that you would use if you were to lose your job. This would include cutting back on unnecessary expenses. With careful planning you can avoid an income crisis.
It is also important to have adequate insurance. You should have health insurance, home or renter's insurance, as well as car insurance. If you live in a flood plain you should also have flood insurance. This insurance protects youfrom losing money when an accident or disaster happens.
2. Other Emergencies
It is also important to be prepared to face emergencies that are not financial. For example it is a good idea to have a supply of stored water on hand. A two-week supply should get you through most emergencies easily. You should have a gallon of water per person per day stored. This is great to have on hand in case the water supply becomes contaminated which happens occasionally. You should have a five day supply of food and water in a kit that you can take with you in the event that you had to evacuate or if you lost power because of severe weather such as a snow storm or a hurricane. The food you store should be easy to eat without heating it up. This can help if you are unable to visit a store for a short time due to illness.