What To Do When Trouble Strikes

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Trouble. It comes in many forms. A car accident, sudden health issues for you or someone you love, loss of work, unexpected bills, theft, storm or fire damage to your home, or even the unthinkable – a tragic death… and of course, the list goes on. None of us like to think about these things happening to us, but what do you do when it does strike? It’s inevitable that we’ll all be touched by troubles of one kind or another in life and it pays to think through what we’d do and how we’d get back on our feet.

Things to Avoid Doing Where Possible

The following are some basic tips to help get you through the tough times. Don’t feel bad if you’ve done one of these things already, but in an ideal world they’re worth avoiding as much as possible.

Don’t Panic

Easier said than done, I know, but panic never helped anyone end up any better off. You need a clear head and some wise decisions to get you started as you begin to get back on your feet.

Avoid Payday Loans with a Barge Pole

You’ll get these loans within 60 minutes but they have exorbitant fees and ridiculous interest rates meaning you will well and truly pay for the service. The bottom line here is that they sound appealing as fast money but can lead those lacking in financial skills into a world of pain. Don’t fall for it.

Avoid Expenses on a Credit Card

Using your credit card is a good option if you’re overseas, far from a bank and need to pay for a flight or doctor when you really need it, so long as you’re able to pay the bill in the next few months. Otherwise, back at home, seriously try to avoid using your credit card as a backup. You’ll have to pay all the interest on the money you use, depending on the size of the outlay if could push you over your credit limit (resulting in a penalty fee) and the added debt is the last thing you want when trouble is already knocking at your door.

What You Should Do!

So enough about what not to do, here’s what you can do (now) to prepare for that rainy day. And it will happen – it’s (sadly) just a matter of time.

Think Ahead

The best way not to panic is not to have any need to panic because you’re prepared for Murphy’s call when he comes. Don’t troubles always seem to come at the worst most unexpected times? So before they come, plan that they’ll come and you’ll be better off (we’ll tell you how you can do that next, but just be willing to do some thinking and planning first and foremost!).

Have an Emergency Fund

The best thing to have is a savings account designated for emergencies only. Set aside enough to keep you going for 3-6 months. That’s right, 3 – 6 months worth of expenses. If this seems impossible right now, just start setting a little aside, include it in your budget (you have one … right?) and build it up so it’s ready to go when you need it. It will give you a big confidence building buffer zone and help you avoid going into debt.

If you have a Mortgage, get some Life Insurance in the form of Income Protection

You don’t want to rely solely on this but if you do have a home loan it can help you get through while you get back on your feet. The last thing you want is to lose your house as well as whatever else you’re going through so it pays to be covered if you can. Ask a life insurance broker to help you figure out what product is right for you. Mind you, make sure you have that emergency fund as well though!

Think and plan ahead! Be smart. Set money aside. Then when trouble comes, you’ll avoid having a financial burden to add to the saga.

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