Three Steps Toward Protection: How to Help Avoid Financial Emergencies
by Nicolas A. Vasquesz, FIC
As we all learned in 2020, the world is unpredictable. Did you know, according to a 2020 survey from Bankrate, only four in 10 U.S. adults could pay an unexpected $1,000 expense from their savings? What can you do to steel yourself against the unexpected? Read on for three strategies that can help you manage the financial risks of everyday life.
One: Understand Your Finances
It’s important to start with a reasonable assessment of your unique financial situation.
Do you have a spending plan (budget), and is it working for you?
How much would an emergency (big or small) affect your financial standing?
A Modern Woodmen representative can help you review your incoming and outgoing funds and give you an honest assessment. From there, you can work together to maintain or adjust your current plan.
TIP! Financial literacy doesn’t have to come from trial and error. Modern Woodmen’s MoneyMasters program teaches students of all ages how to develop smart financial habits. And it’s free! To learn more about the K-12 program (for schools, home schools and youth groups) or our workshops for adults, contact a local representative.
Or visit modernwoodmen.org/moneymasters.
Two: Build an Emergency Fund
Emergencies come in all sizes. And they throw everything off balance. The best financial strategy is to plan ahead whenever possible. That will help whether you’re facing a car repair or sudden unemployment. If you don’t have extra funds to set aside for emergency savings right now, take another look at your budget. Are there any small expenses you can cut? Even $20 a month stashed into an emergency fund will build over time – and it could be life-changing if (or when) it’s needed.
TIP! When disaster strikes, Modern Woodmen can help you keep your life insurance coverage in place when it’s most crucial. With our Fraternal Aid Fund, members experiencing a financial hardship due to a natural disaster or medical emergency can apply to have their life insurance premiums covered for a limited time.
Three: Protect Your Family with Life Insurance
Life insurance is the foundation of your financial plan. It protects against the absolute worst-case scenario: an unexpected death. In general, life insurance is easier (and cheaper!) to get the younger and healthier you are, so it’s important to not wait to add or increase coverage.
TIP! In addition to safeguarding your family, permanent life insurance offers living benefits for you. It builds cash value, which you could borrow from in case of emergency. Contact a Modern Woodmen representative to learn more.
Founded in 1883 as a fraternal benefit society, Modern Woodmen of America offers financial services and fraternal member benefits to individuals and families throughout the United States.
