If we had it our way, nothing bad would ever happen to us or our loved ones. Unfortunately, life does not usually work that way. People lose jobs, relationships shatter, people get injured, loved ones die. There are so many things that can go wrong in life and, as terrible it is, the only way to get through those times is to be prepared for them. Having savings and contingency plans for the worst curve balls that life can throw at you is the only way to make the best of a worst-case scenario.
The worst part of tragedy is being side-struck by it. Losing someone, a job, or being injured can all impact our lives. What you never want, is the tragedy to change your life for the worse. Being financially unstable can lead to losing possessions, your home, and your credit. You’ve already suffered so much, and now you have to suffer even more. It won’t be fair when tragedy strikes, but to protect yourself from fallout damages, you need to be prepared in advance.
1. Finances
To be truly prepared for the worst case, you should have enough saved to support yourself (without an income) for eight months to one year. This is the ideal amount. You can find how much this is by first budgeting properly. This means determining the following:
2. Base Expenses
No matter who you are, there are a set of monthly expenses that you cannot cut out. These include rent, utility bills, debt repayment, or otherwise. Knowing what you have to spend each month is the first step to determining your monthly budget. These expenses are typically always the same, month to month. The only variable would be a raise in rates or interests.
3. Variable Needs
These expenses are for needs that although essential, vary in price. Food and supplies fall under this category. Keeping track of how you spend you spend your money is a great way to determine the average amount you need. It is also a great way to weed out any unnecessary purchases. Keep track of your spending and you will be able to make smarter, better decisions regarding spending and saving.
4. Extra Expenses
These are the expenses for personal pleasure. While it is a great idea to keep track of them for savings purposes, they are not necessary to include for your emergency savings. These are the luxuries that we all afford ourselves. If you want to save money, or cut on spending, it is typically from this section that you should look first. You would be amazed at how much money a person can save when they, for instance, stop buying coffee at a café and instead make it at home.
Most Americans don’t have more than $1000 in savings at any given time. An astonishing 30% don’t have any savings at all. Living paycheck to paycheck is the reality for many Americans, and it is the most precarious place to be. If anything happened, from a serious loss, injury, or even a large expense, these Americans don’t have anything to buffer them.
That is why is important to make it a priority and now what and where you are spending. In many cases, simply spending smarter is all you need to put away money each month. This money should be put into a savings account. Think of it as another base expense, only this money is there in case anything terrible happens. Being caught off guard when you live paycheck-to-paycheck can feel like a death sentence for some. Make it a priority to save for the worst case, and at the very least you will have started your retirement fund.
5. Insurance
Insurance isn’t just something you should have, it’s the law. Insurance is also what will protect you. While savings are your last fall back in case something goes wrong, insurance is your first. When you get into any kind of accident that was not your fault, you deserve compensation. There are many costs and bills that come after an accident. You need insurance to protect you. For instance, in a car accident that was your fault, it is the insurance company that will pay for the damages.
This means that instead of you paying for the damages out of pocket (which could total thousands of dollars) you instead pay an increase in your premiums. When an accident wasn’t your fault, however, you need a professional like a Babcock Partners injury attorney. Having a personal injury lawyer is important for several reasons:
- There is a lot of work to be done.
A lot of the work that a personal injury lawyer is done behind the scenes. This includes getting records, reports, and other bits of information like witness testimonies together. While you may not hear from them during this time, you have a right to be updated when requested.
- Not all accidents are cut and dry.
Not all accidents occur in a car. There are medical malpractice suits, wrongful death suits, and more. If you are injured because of the negligence of someone else, you have a case to press for compensation. Proving that negligence is where having a lawyer comes in handy. When proving a case in the legal system, you want to have someone who knows the law and can work for you.
- It’s the best way to get a good offer.
If an insurance company (or others) feel like they can get away with it, they will try to pay you the least amount of compensation. That is why you want a lawyer on your side who will force the company to pay you what you are due. If you are not happy with the offer, you can then go to court. As soon as you go to court, you absolutely must have a lawyer represent you.
- They can work on your behalf.
Creditors, when you give them notice, can be reasonable. For instance, you can get your debt repayments paused or lessened while you are injured and in the hospital. You can have your lawyer contact your creditors on your behalf to make a reasonable deal. This could be a pause on repayments, or it could be a portion of your settlement.
Asking for Help in Advance
People generally will want to help you, however asking for help as a last-ditch effort can put them on the spot and put them off. Knowing how to ask for a favor can go a long way. If you are living paycheck to paycheck, or have dependents, it’s always best to know who you can go to and who you can rely on if anything ever bad happened. For instance, if you are a single parent, do you have someone who will take care of your kids if you are ever hurt? If you lose your apartment, do you know who you are going to stay with?
Knowing you can rely on someone is crucial to being able to live a healthy lifestyle. Follow these steps in order to have a solid contingency plan for the worst-case scenario:
- Ask in Advance
Always ask knowing that they will be doing you a huge favor. Giving them a heads up and more time to prepare their answer, instead of being caught off-guard, will also increase your chances of your friend or loved one to agree to help you, even if it’s a life-time commitment (for instance, taking care of your children if you were to die).
- Give a Good Reason
In general, asking for help when you have hit rock bottom is typically a good enough reason as it is. However, if you are someone who usually can’t make ends meet, you might find that your friends are less willing to help you out by enabling the same behavior. When you ask for a favor of this magnitude, you want it to be because you will have nowhere else to go.
If you have a habit of cashing in on this favor, the only way to continue is to ask for forgiveness and instead ask your friend or family member to help you get your life back on track. Just because they are willing to help you in your time of need doesn’t mean that you can use them all the time.
- Let Them Say No
No one likes to feel pushed into anything. It always must be their choice to help you out, and so when you ask for help, give them an escape clause. The beauty of asking well in advance for help in your worst-case scenario is that you have time to find someone who is willing to help. If you force your friend or loved one to promise to help you, you will probably breed resentment.
Giving them the ability to say no also increases the chances that they will say yes.
Preparing for the worst is how you can live a healthy lifestyle. Knowing that you are secure and have the financial backing in case anything happens can relieve stress immeasurably. Be prepared, be aware of your options, and always be careful. The best way to prepare for the worst-case scenario is to be proactive with your safety and your finances.
