In this super busy life of ours, where we have so many things to deal with, financial stability seems to be just a fancy word. Rents, bills, old debts, daily expenses, and the list go on and on and this is why most of the family nowadays are financially stressed. But whatever may be the situation, you need to have some money kept in your pocket in order to make sure that you are ready if any financial emergency arises.
A financial crisis is something unavoidable and one would definitely face it at least once in their lifetime. Yes, there will be an option in front of you to handle these situations by applying for Loans for bad credit and no guarantor but the best way to deal with such situations is start preparing from the very start so that one does not suffer any financial damages. Here in this blog, we have prepared a list of items that you should include in order to guard yourself against any financial emergencies. So let us see them one by one.
Items that can protect you during any financial emergency
1. Saving account for emergency
This type of account is not an investment account which you can use to grow your money but rather it’s a safety account. People use these funds to handle situations such as unemployment, sudden medical emergency, urgent home repairs, and others. The best way to establish this type of account is to have a family budget and keep transferring funds on a monthly basis.
2. Life insurance can be really helpful
This is something that you must have had heard from your colleague, friends, and family members. Having life insurance is something that everyone should do because you need to save money in order to make sure that your family members or your financial dependents are able to manage without any difficulty or trouble in the future.
3. Create a will
This is also something very important and quite simple to implement. According to this critical document, a legal guardian will be assigned to look after your children if the spouse is not given the responsibility. Mostly, one third to one-half of your asset will go into the hands of your spouse and the rest will be for your children which will be handled by the legal guardian until the children turn into an adult.
4. Maintain a good credit profile
It is very important that you maintain a good credit score so that you won’t face any difficulty in borrowing a loan during an emergency situation. You should know that most of the banks and credit unions perform a hard check on the borrower’s credit profile before approving. However, that doesn’t mean you cannot borrow a loan if your credit profile is not good, there are many well reputed private lenders in the UK like Everyone Loan, Amigo loans, and others who offer bad credit loans without guarantor. But the interest rate offered to you may be higher than what will be offered to a person with a good credit score. Thus, the best is to keep your credit profile strong and here are some ways that can help you with that:
- If you are paying an old debt, then try to pay slightly more than the minimum amount. However, make sure that it doesn’t affect your monthly budget.
- It’s better to pay a day early than paying a day late. Late payments have a negative impact on the credit profile of a person and thus, affecting his/her credit score.
- Lastly, try to avoid using your credit card up to the maximum limit as it can lower your credit score. Always maintain a balance and use maximum up to 50% of the card limit.
5. An education fund for your growing children
As a parent, we all want to give our children nothing but the best in life. As your children will grow, you will do everything to make sure that your children receive the best schooling facility and when they grow older, they get admission to one of the well-reputed universities. Well, in order to turn this dream of yours into a reality, you need to start saving for your children from the very beginning. Have a separate saving account for your ward and keep investing in it on a regular basis.
Wrapping up, these were some of the effective tips that can help you prepare in advance to counter any financial emergency in life.