Prepare for common emergencies

How much you need in your emergency fund depends on your particular situation. You will not experience an emergency in the same way as a friend or relative. That said, everyone can prepare for common emergencies.

Medical Emergency

In 2015, nearly 43 in 100 people in the U.S. visited an emergency room, according to data compiled by the Centers for Disease Control. Though emergency care costs vary, averages exceed $1,200 per visit. Do you know what your health insurer covers? Could you handle such an expense, even with health insurance?

Job Loss

The average person remains unemployed for 24 weeks, or approximately six months, after a job loss, according to the Bureau of Labor Statistics Links to an external site. (BLS). If you lost your job, how long could you live off your savings? Would you be able to remain in school? Would your landlord let you slide on rent payments?

Car Repairs

Being without your car because of an accident, repairs or other damage can cause big hassles. Beyond the cost of fixing your vehicle, think about lost income when you cannot get to work. Even the stress of relying on friends or family for rides takes its toll. Your backup plan could include renting a vehicle, riding a bicycle or taking public transportation. Are these optimal for your situation?

Natural and Man-Made Disasters

Natural and man-made disasters can be disruptive. Being prepared can somewhat mitigate the consequences, but recovery might be a long time coming. Would you be able to protect your health and life as well as those of your loved ones? Could you secure financial help or benefits?

Unplanned Travel

You might need to travel when there are illnesses or deaths in your family. Last-minute flights can be costly, adding to the stress of the situation. How would you handle paying for a trip back home? Would you be able to think clearly in such a situation?

There is power and relief in having funds to rely on if you encounter unplanned expenses. A solid long-term emergency fund can help you sleep better at night, knowing you can survive most potential financial calamities.

 

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