This post is part of the one day blog event “The Spectrum of Personal Finance.” In this event, comic book nerd Brian of My Next Buck, will discuss 8 different emotions (taken from the Green Lantern comic series) and relate them to personal finance. Here at Mrs. Micah: Finance For a Freelance Life we will be looking at Love. To view the rest of the event look at the bottom of the page to see the other blogs hosting articles.
There are a lot of money saving discussions on blogs similar to Mrs. Micah’s (but hers is one of my favorites!). Some of those suggestions are about saving money in the short term. Some are about making money in the long term. Others are about making wise financial decisions. However, sometimes we have to throw all of those money saving and money earning techniques out of the window because of a dire situation. When a family member or close friend has a problem, we look deep within our hearts and do whatever it takes to aid them in their time of need. The overriding emotion that can throw our finances out of whack in the spur of a moment is love.
The love we have for our friends and families can sometimes put ourselves in precarious financial situations like nothing else would. Think of what lengths you would go to if a loved one was sick, or had an emergency and needed your support. You may be required to hop a flight, or pay for a medical procedure, and for someone you love, the words “I can’t afford to help” don’t come to mind.
You never know when the next emergency will come up to you or someone close to you. That doesn’t mean you can’t prepare yourself for an eventuality. Here are 6 ways you can protect yourself and your loved ones before things may take a turn for the worse:
- Encourage Preventative Maintenance – By making sure that you or your loved ones are doing the right things; eating healthy, staying active, etc. you cut down on the likelihood of any major medical problems down the road. This not only cuts down on potential emergency expenses, but also on insurance premiums.
- Emergency Fund – As the title of the fund suggests, by having an emergency fund, you prevent needing to use other resources to take care of a dire financial situation. Setting one of these funds up is almost essential for anyone taking their finances seriously. However, most people don’t think about when to spend this fund. Helping a loved one in crisis could be one of the times when spending the fund is appropriate.
- Increase Credit Limits – Calling your credit card companies to increase your credit limits has multiple benefits. Having an increased amount of funds available to you when in a tight spot is always a good thing. It should be remembered that if you need a large amount of money instantly you may not be able to pull out as much as you need from an ATM – that’s where the credit card comes in. Additionally there are added benefits to having larger credit limits, like decreasing your credit utilization therefore raising your credit score.
- Sign up for a Home Equity Line of Credit – The same as above. Diversifying your credit and having more if necessary is incredibly helpful in the case of an emergency. Just remember, you don’t want to start spending all sorts of cash just because you have the credit to do so. It’s there to protect you from financial ruin. There are also plenty of risks to using a HELOC, but those risks are unlikely to dissuade you if the worst were to happen.
- Know Your Insurance – Keeping good records is one thing, but do you know about each of your coverages (home, auto, medical, dental)? Knowing your coverages and deductibles can create a sense of calm after finding out about a terrible situation. If you are able to slow down, and assess the situation without freaking out, everyone involved will be better off and thank you for being a steadying presence.
- Educate Family on Finances – One way to prevent financial ruin of someone you care about is to provide them with the tools to handle these situations by themselves. By reaching out to the people you care about to try and improve their financial health, you make the tough times easier.
I hope and pray that a situation never occurs where your preparation for an emergency is necessary, but as humans we sometimes need to expect the unexpected. Hopefully these tips help you prepare for the day when you would otherwise overextended yourself to come to the aid of a loved one.
For further reading of the Spectrum of Personal Finance Event, please see:
- Fear at Bargaineering
- Hope at Budgets are Sexy
- Avarice at Consumerism Commentary
- Willpower at Debt Free Adventure
- Death at Free Money Finance
- Compassion at Get Rich Slowly
- Rage at Poorer Than You
To view a recap of the event, check out the Spectrum Roundup at My Next Buck