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Why It’s Important to Always Have a Backup Plan
The most elaborate projects encounter setbacks all the time. Sometimes the impediment is so great that the project planners must fall back to something else – an alternative plan.
It is the same with personal finances. We plan out our lives. Everything looks great until something unexpected happens. It doesn’t always have to be as bad as the loss of a job or death of a loved one. Sometimes it is something as positive as the entry of a new family member or landing the perfect job that requires immediate relocation.
Whatever the case, these financial emergencies can shake things up for you. How you prepare for these unforeseen moments can make the difference between a slight bump in your financial life and out-and-outraged that shakes your entire life. Read along to find out why we make this claim.
1. Your life or the life of a loved one may depend on the backup plan
We are referring to the backup plan specifically in terms of personal finances. In case of an accident or unexpected health crisis, an emergency medical attention is of the essence. Unless you have a very robust insurance cover, you will require out-of-pocket cash to summon emergency medical services. What if you don’t have the money? What happens if you don’t have a way to raise it for, say, at least a week? That can be a terrible place to find yourself.
Knowing what resources are at your disposal can be the difference between life and the loss of it. People who have had serious unforeseen medical expenses arise will probably tell you how glad they were to have had emergency funds or access to emergency loans, or how hard it was to find the money to cover those expenses.
2. Saving your business from collapsing
When you are a B2B entrepreneur who supplies customers with particular goods, timely delivery is critical. A slight delay in schedule could lead to huge losses in business. You don’t want your premium client to replace you with a different supplier because you’ve failed to meet a delivery schedule. A financial backup can be a lifesaver – ensuring that you don’t lose your best paying client. It can as well help you keep your operations going in the event of a sudden financial crisis.
3. Surviving the risk of losing your dream job
What do you do if your dream job comes along when you’re least prepared financially and requires that you relocate? What happens if this coincides with a moment when there is a problem with your only credit card?
Moving can be expensive. You’ll need dependable alternative financing or you may be unable to take up your dream job. An adequate emergency fund would help. Alternatively, you may turn to alternative emergency funding that some lending sites offer today. Be sure, however, to get more information regarding these alternatives before signing a deal.
These three – and many more – are situations that many of us face from time to time. How you prepare for them can ensure their occurrence doesn’t crush you and destroy your otherwise happy life.
Marcus Besson is a professional blogger and freelance writer specializing in personal finance. He writes for different websites and has appeared in several publications; both online and offline.