You Never Know – 3 Unexpected Events That Can Impact Your Finances

by Guest on January 12, 2012

So much of life is made up of unexpected adventures that we could have never foreseen. That’s part of what makes life so exciting, but it’s also what can make it so stressful and unmanageable. You know what they say: “Even the best laid schemes of mice and men oft go awry.” That’s definitely the case with finances, when months of savings can be blotted out by a single auto accident or personal injury. You never know when you’re going to get stuck paying a mighty deductible on an insurance claim, or when you’re going to need expert bail because of a case of mistaken identity. Planning for the unexpected can help you to better deal with a stressful situation when it arises. Here are the most common wrenches that can be thrown in the clockwork of your finances:

Auto accidents. Most people have car insurance, but even if you have good coverage, an auto accident in which you’re at fault will still require your spending money on a deductible. Sometimes even if the accident is not your fault you can be stuck paying an upfront deductible while the insurance claim is processed. Plan ahead by paying for reliable car insurance that won’t stick you with unreasonably high deductibles.

Personal injury. Being physically injured is virtually impossible to predict. Obviously, if you work in a high-risk career, such as construction or extreme sports, you can anticipate that you will probably need good health coverage. But even people who have very little risk of injury in their lives can suddenly find themselves being the victim of a hit and run accident or just a badly sprained ankle. Again, plan ahead by purchasing a reliable health insurance plan that will pay for medical procedures in the event that you are injured. It can be the difference between a $500 deductible and a $50,000 medical bill that will leave you in debt for a decade.

Stock market crash. This one is a little too close to home for some people. The stock market collapse of 2008 left many people without their retirement savings or nest eggs. Many still haven’t recovered their losses. If your portfolio is full of risky investments that you can’t afford major losses on, it might be time to think about selling and reinvesting in bonds or a retirement plan. Not everyone can afford to risk their futures on the vagaries of Wall Street.

These are just three of the countless unexpected hits we can take in life that can set us back in our finances. While you can’t necessarily predict these circumstances in advance, you can create a safety net that will catch you in case they do occur. Contingency plans like insurance and safer investment strategies can be the difference between you losing hundreds of dollars and losing thousands of dollars.

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