Critical Ways to Prepare for Financial Challenges

Many people need to file bankruptcy because they were not sufficiently prepared for a crisis, such as a natural disaster, job loss, or serious health issue.  It’s extremely important to prepare for these kinds of events before they happen.  If you take these critical steps to prepare, you’ll be able to handle any kind of challenge that comes your way.

  1. Save.  You should have an emergency savings account so that you can cover your living expenses or deal with unexpected financial needs.  How much should you have?  Experts recommend having enough money to cover your living expenses for a couple months.  That sounds overwhelming to many people.  You can start small.  Even if you save only 50 cents per day, you’d still have nearly $200 at the end of a year. Figure out an amount that is feasible for you, and start to save consistently.  Little by little, it will add up, and you’ll have resources when you need them.
  2. Budget.  Keeping a budget is an essential step for maintaining financial health.  Budgeting ensures that you spend less than you earn.  Budgeting is also a great way to make your emergency savings grow.  Make a plan for how to spend your money, and stick to it.  If you can start your budget and stick to it when things are good, you’ll be able to do it later if you need to reduce your expenses for an unforeseen challenge.
  3. Pay your bills on time, every time.  There’s no need to waste your money on late fees.  Be responsible for your commitments and pay bills on time.  Not only will you free up more money for your budget, but you’ll also raise your credit score, which can save you additional money.
  4. Make sure you have sufficient insurance.  The time to get insurance is before you have a crisis.  If you ever need it, you’ll be extremely glad you have it.  See our previous post for the 5 types of insurance everyone should consider.
  5. Reduce your debt.  If you can, you should repay your debts and avoid getting new debt.  If your debt is overwhelming and cannot be repaid in a reasonable amount of time, you should consider filing bankruptcy.  If you are already under a heavy debt load and a financial crisis comes along, it will be devastating.  Call our Syracuse bankruptcy office to discuss the best way for you to get out of debt.

Financial difficulties happen to everyone.  People who are prepared can get back on their feet more quickly when they come.  Take steps now to be prepared so that you and your family can get through whatever challenges come your way.


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