October 5, 2010
Expect the Unexpected
You are on top of every aspect of your life, but even the most organized person can lose her balance when life throws a curve ball. Unexpected health issues can arise at any time, no matter how healthy you are. How can you be prepared?
"The best way to be financially prepared for unexpected life changes is to make sound financial practices early on," advises Iffath Lotallah, an independent accountant. "The sooner these habits are formed not only will your current financial situation improve, but you will be better prepared for the unexpected." New England Financial Advisor Nancy Sobin agrees: "Everyone should have three to six months worth of living expenses saved up to take care of them in an emergency. I know some people who have 12 months worth saved!"
Lotallah suggests creating a budget by putting all your expenses on a spreadsheet and keeping track of them. "Set aside at least 10 percent for unexpected expenses as soon as your paycheck hits your bank account," she says.
First step, determine the initial amount to set aside that is most feasible for you. Factors to consider include your current income, how many dependents you have and amount of debt.
Make sure that the account you set up for your health fund has high liquidity. Savings, checking and money market accounts and short-term bonds are good options.
Finally, learn how your personal health insurance works, from how much your co-pay is to what doctors can you go to and how much they will pay in specific situations. Being covered can save you from bankruptcy and unexpected debt.
Bonus PINK Link: Here are 23 ways to improve your health and change your life – in two or three minutes!
By Muriel Vega
"You know, I have never lived a life that I thought I could plan out."
Hillary Rodham Clinton