You get a late-night call to the emergency room. A tree blows over in a storm. Your car just won’t start. When sudden problems catch you unprepared, it can spell big financial trouble for you and your family. Luckily, a little planning can take the sting out of emergencies.
Here’s what you need to assemble your (financial) disaster kit:
Set up an emergency fund.
If you’re unable to work or fronting steep bills, a safety net gives you time to plan. The ideal emergency fund covers six months of living expenses for the entire household. It should be liquid—easily converted to cash—so you can access it promptly when problems arise. Sound daunting? With the budgeting tool My $ Manager in AxiomGO, you can set financial goals and easily save a few dollars of every deposit for the next rainy day.
Have a backup budget.
Routine expenses are like leaks in a boat: They’re small, but they make a big difference over time. Keep a close eye on your household spending and decide where you can cut costs in an emergency. In My $ Manager, you can see a snapshot of your financial life in bills, loans, savings and daily spending. It’s easy to set a budget and stick to it, thanks to tools that visually track your progress and remind you when you’re nearing your spending target.
Know your available credit lines.
No one wants to be caught in a debt crunch with bills on the table. On the other hand, carefully monitored credit lines can give you breathing room when you’re caught unprepared. This isn’t a tactic without risk, so read the fine print and know your obligations. Don’t borrow without a plan to repay – managing credit should be part of a bigger strategy to get back on your feet.
Understand your insurance policies.
Research your health, vehicle and/or home insurance policies and find out what they do (and don’t) cover. Know your copay for basic services and your annual out-of-pocket maximum. If your healthcare plan subsidizes preventive services like immunizations, check-ups and screenings, use them!
- Start today.Saving for a rainy day is a commitment, especially for households already living on a strict budget. That’s why it matters to start as soon as possible. Whether an emergency occurs next year or next month, every moment counts.
Axiom Bank, N.A., a nationally chartered community bank headquartered in Central Florida, provides retail banking services, including checking, savings, money market and CD accounts, as well as commercial banking, treasury management services and commercial loans for both real estate and business purposes.