Planning and starting a family is both exciting and daunting, as it should be. While there is much to plan for, life happens unexpectedly which means the things don’t always go according to plan. The fact is that most people are just a paycheck away from financial disaster, yet the odds of an unexpected occurrence such as a job loss, a medical emergency, a debilitating accident, or even a death in the family are fairly high when you consider them all together. Taken as whole, the question is not if a financial disaster will strike, but when... Stuff happens when it is least expected it and it is up to the new parents to guard against possible financial consequences. Here are five essential steps everyone needs to take to prepare for the unexpected:
Establish an emergency fund: Set aside in a short term savings account to cover six to twelve months worth of living expenses.
Insure everything: If you own it, you should insure it your home, your car, and your possessions.
Insure your life: If you have someone who is dependent upon you for their financial security, then it is an absolute no brainer. Not only is buying life insurance to protect family members a demonstration of unconditional love, it is just the responsible thing to do.
Insure your biggest risk: Before you turn 65 you have a one in five chance of suffering a long term disability that will prevent you from working for more than 90 days. If your employer doesn’t offer long term disability, then you should look into some individual coverage. Not everyone can qualify for it, so if you do, then you should buy it.