What Can You Do To Protect Yourself Against Financial Hardship?

Financial hardship can present itself in so many different ways. There are some definite steps that you can take. Let’s talk through these –

1) Make sure that you have an adequate emergency fund – I would even suggest that this is more important than saving for the future. It is vitally important to make sure that you have enough cash on hand in the event that life throws you a curve ball.
2) Make sure that your cash is working for you and make sure that your cash is in a safe place – savings accounts at banks are just not paying the going rate in savings. At some banks the rate could be as low as 0.50%. Check around and make sure that you are getting the going rate on your savings. In addition, make sure that you don’t exceed the FDIC insurance for any bank. The government insures deposits up to $ 100,000 per depositor. Anything over that is at risk.
3) If in the state of Texas, either issue a credit freeze on your credit files and or take out Identity Theft monitoring. I cannot stress enough how important it is to protect your identity.
4) Understand your health insurance and what you might have to pay out of pocket in the event of an illness.
5) Make sure that you have some type of disability insurance policy in force either through your work or through an independent policy.
6) The obvious thing to do is to make sure that you work as hard as possible at getting out of debt. If you have a lot of debt, put together a debt inventory so that you would know exactly the state of your situation.
7) Know where you are spending your money. If someone called me and needed a consultation session regarding a financial emergency, this would be the first thing that I ask for to determine the shape of the situation.
8) If it looks like you are running into a financial problem, be proactive and make sure that you know all of your options. There is a tendency to bury your head in the sand. Make sure that you start checking into every available option.