Nearly 40% of Canadians lack enough cash in their accounts to cater for a financial emergency. This is rather worrying considering the uncertainties of life.
The lack of a safety kitty can be attributed to many things, among them unemployment, underemployment, poor financial management, insufficient saving habits, and cost of living.
This notwithstanding, the need to have a plan for when unexpected expenses show up cannot be emphasized enough. Here are three tips to help you plan for emergency costs.
1. Identify a Fast Lender
While most facilities have a lengthy process, you need a quick loan when facing a financial emergency. Contract payday loans in Canada can be a great option.
Keep in mind that the best time to begin identifying a good lender is not when facing an emergency. Instead, research different lenders and what their requirements and terms are.
When you need a loan quickly, you will only need to make the application, and the finds are often released within 24 hours.
2. Build a Savings Kitty
The best way to plan for unexpected costs is through savings.
Ideally, you should have at least three to six months of your total living expenses in your emergency kitty.
If you are a single family household or are single, you need a fund that covers your expenses for about a year.
Such a kitty cushions you from job loss or illness and protects your finances from unexpected expenses.
Saving is not always easy as there always seems to be numerous other competing expenses. One thing you can do is open a savings account separate from your current account. You can put a specific amount of money there every month or have a standing order from your salary account.
3. Take Preventative measures
Instead of waiting for unexpected expenses to show up, you can get ahead of things by preventing them in the first place.
Think proper maintenance of your home to avoid being hit with huge repair costs from the blue, eating well, and taking care of your health to keep illness at bay, and so on.
However, it’s not entirely possible to wipe out all unplanned expenses. Insurance can ensure medical bills, home repairs, and car accidents don’t cause mayhem.
Talk to your provider if you live in an area prone to natural disasters. They can advise you on the additional covers to take.
Unfortunately, you are almost certain that some unexpected expense will come your way at one point or other.
Instead of burying your head in the sand, hoping the inevitable doesn’t happen, it’s best to be more proactive. This allows you to avoid them or, in the very least, plan adequately for when they do happen.