Emergencies Real or Imagined?

One area where most Canadians could use improvement is in the area of Emergency preparedness as it relates to their finances.

Most of us will suffer from illness or disability before the age of fifty, but many of us have not prepared ourselves financially for this reality. We haven't purchased adequate amounts of insurance to protect us for this eventuality nor have we saved the required three to six months of savings for this stage of our lives. Many of us have purchased life insurance but haven't purchased disability insurance, critical care insurance or long term care insurance to sustain ourselves if we can't work for any period of time.

Some of us at have a line of credit that could be used for an emergency fund as a last resort...

Since most of us haven't been able to save the three to six months of salary that most financial experts advise that we do. We may at least be able to use our line of credit as a back up plan as long as the line of credit isn't at the max.

Additional problems are incurred when individuals must use their credit cards, overdraft and borrowing from pay day loans, cash money stores or  finance companies as a way of sustaining them through a financial emergency. Most of these individuals have no real plan as to how to pay back the borrowed funds.

We call them emergencies but really we should be prepared for them or at the very least we should be preparing for them on an ongoing basis.

Life's little Emergencies could be any of those times when a household appliance breaks down:...

• such as washer, dryer, dishwasher, stove, fridge, etc.
• the family / household vehicle(s) break down or needs to be maintained (oil changes, car washes, new wiper blades, tires, etc.)
• income earner becomes ill or disabled.
• job loss occurs

Many times credit cards, payday loans, cash money stores or finance companies are used to borrow funds to pay for the expenses related to Life's little Emergencies and sometimes the individuals borrowing the funds have no plan(s) as to how the debts will be repaid. 

If you would like to be prepared Financially for Life's Emergencies contact A Step Beyond.ca.  The following services are provided:

• an individual Financial Assessment prepared by a credit and debt counsellor with several years experience assisting individuals to prepare for Life's little Emergencies.
• prepare budgets, spending plans, pay cheque planners to assist with the day to day managing of your money. for more