I am moved by the fact that tens of thousands of individuals in the interior of B.C had to abandon their lovely homes because of fire. Even if you were not affected by this emergency, the chances are that you would be in bad shape if the disaster had struck you. Though people can try as much as they can to be in control of their debts, they may be lacking adequate savings to survive such crisis. Therefore, I think it’s advisable to come up with a robust saving plan to be able to deal with fire and other similar crisis. However, my spouse thinks that paying off our debts should be a priority. Kindly advise.
Unexpected emergencies such as floods, forest fires, unemployment, and more are associated with serious financial crisis. One effective way of dealing with such crisis is by following the slogan of the Boy Scouts, “always be prepared.” Therefore, having a clearly-defined and well-thought out financial emergency plan can alleviate the potential risks. One of these financial emergency plans is an emergency savings fund.
Well, your spouse’s idea of paying off your debts before you initiate an emergency savings plan is good. However, the moment you get hit by an unexpected disaster, that’s the time you are likely to borrow more to help you get out of the mess safely. This implies that you are likely to take more debt rather than debt settlement. A better option would be keeping your debt low at a slow pace so that you can begin saving for unforeseen circumstances.
According to experts, with a major disaster, the first 72 hours are crucial. It’s important to be self-sufficient and own enough water, food, and other resources that you can use before you receive help. Keep in mind that if you must leave your home during a catastrophe, it means that you might not have an advance warning. Therefore, having emergency savings can be of great help.
Based on various experiences of our customers, we highly recommend that you have at least three to six months of living cost set aside to take care of any possible emergency. In case you are paying a mortgage, we strongly advise that you should set aside at least six months of living expenses. This will help you meet the mortgage expense and you will not sell your home even when the disaster strikes.
The thought of saving three to six times your monthly living expenses might seem to be an impossible milestone. However, committing to save little by little each month can help you achieve your goal. Regardless of whether it will take you two, four, or five years to hit your emergency savings goal, it’s important.
Note that it’s easier to save when you open a separate bank account. To make sure that you will not use part of your emergency savings to finance the petty expenses in your home, make sure that you can’t easily access your emergency savings using your bank card.
So, for you to survive financial crisis associated with floods, forest fires, and other natural disasters, you need adequate emergency savings. Besides, you should practice a sound debt settlement Toronto strategy to ensure that you can still save and keep your debts low.