Expecting the Unexpected: Financial Resilience Strategies
“No one can predict the future,” notes Will Loftin, Chief Retail Banking Officer “but there are things you can do to prepare for the unexpected. Here at Origin, our mandate is to equip our clients with the strategies necessary to navigate any financial hurdle.”
Whether you need to financially prepare for a job transition or just want help with financial safety net planning, the experts at Origin Bank are here to help. Today, we’re sharing six steps you can take today to ensure unexpected events don’t derail your long-term financial goals.
How to prepare for unexpected expenses
While you can’t prevent unexpected financial hardship, you can prepare for it. Keep your finances on-track with these helpful tips on how to prepare for unexpected expenses and life events:
1. Build up your emergency fund.
From college funds to retirement nest eggs, savings are always important. And the savings in your emergency fund can be a lifeline. Building financial stability during uncertainty makes a big difference, and experts advise saving up at least three to six months' worth of wages. That way, if you lose your job, you have a cushion to support you through the next job hunt. That cushion can also help ease the stress when other financial challenges, like illness or natural disaster, arise. Keep these funds safe and risk-free in a savings account so you can access them immediately if needed.
2. Review your investment portfolio.
Once you’ve built up your financial emergency fund, focusing on contributing money to investments that can grow with you. Put your dollars to work in a mutual fund or other interest-bearing option. If your money is already invested, make sure to review your portfolio regularly to ensure it aligns with your savings goals and timeline.
3. Take full advantage of your job’s health benefits.
If you work a full-time job with benefits, make sure you’re not leaving any insurance perks on the table. Check to see if your employer offers a health savings account (HSA) as part of its insurance package. This is a tax-advantaged account that enables you to pay down healthcare costs with funds collected pre-tax, offering vital financial help during a medical emergency. Unused funds roll over from year to year and keep growing. This means more bang for your buck, and a built-in safety net that you can access even in retirement.
4. Consider life insurance.
When it comes to protecting your loved ones from economic hardships, life insurance is a crucial consideration. Many jobs offer free life insurance policies for employees, while other people choose to bundle it with car insurance or other packages. Whatever your situation, consider double-checking your policy or purchasing one if necessary. These funds can help keep families above water after the death of a loved one.
5. Use your credit card wisely.
Managing debt during job loss is also crucial. If you fall on hard times or experience income loss, you might find yourself relying on a credit card more heavily than usual. Keep in mind that cards with high interest rates can make your balance balloon fast. If you’re preparing for the unexpected or you’re in the midst of upheaval, don’t ignore the importance of making debt payments part of your budget planning.
6. Don’t forget unemployment benefits.
Whether it’s a family relief program or medical debt forgiveness program, social services can act as a safety net during crisis and financial hardship. If you lose your job or health insurance, contact your local department of human or social services to inquire about eligibility. Organizations like these can help with everything from food and housing to health and child care. And if you’re currently insured through your employer, you might be eligible for continuation coverage under COBRA. This federal law can help you extend your coverage for 18 to 36 months in cases of job loss or other qualifying events.
Coping with financial uncertainty is never easy. Whether you’re currently navigating financial emergencies or preparing for future uncertainty, Origin Bank employees can serve as a valuable resource for financial recovery. Explore Origin Bank’s blog for more helpful tips on saving, budgeting, and beyond.