Avoid A Financial Disaster With 1) An Emergency Fund And 2) An Opportunity Fund

by Regina

debt relief, saving money

woman-working-with-her-personal-finances-and-conducting-a-financial-fire-drill-by-go-ask-alice.jpgThere’s no time like the present to conduct a review of your personal finances.

The question you should be asking is: Would you be ready if you had a sudden financial emergency?

Does the thought of not having enough money to covers your bills scare you?

If so, then you should do these things now in order to prevent a financial disaster around the corner…


Prevent A Financial Disaster

Take the time now to conduct a financial fire drill. Bascially, this just means to pretend that you have a financial emergency and then lay out a plan for what what you’re going to do and how you’re going to cover the costs.

Here’s how to create a financial fire drill for yourself:

  1. Create a response plan with regards to your fake emergency. Write out step-by-step what to do in the event this emergency occurs. This will help you to have a plan in place ahead of time, rather than face a financial disaster.
  2. Create a financial plan. Figure out how much money you’ll need to cover this particular emergency, and then put together a plan to save that amount of money. That way the plan and the money will be in place in the event this emergency actually does occur at some point in the future.

Here are some other ways to prepare yourself for a financial disaster:


Do You Have An Emergency Fund?

An Emergency Fund is a small savings account that will protect you in the event of a financial disaster.

For example, if you or your spouse should get laid off, or if you are in a serious car accident, or even if you get pregnant and it ends up being triplets instead of just one baby — you’ll need some extra money to take care of the extra expenses.

For those types of things and more, you really need to start saving now. Otherwise, it is likely that a financial disaster could be in your future.


Do You Have An Opportunity Fund?

If you’re not in the midst of a financial disaster right now, then you should simply be taking steps to prevent one from occuring.

One of those steps is to create an Opportunity Fund.

Most people don’t think twice about using their credit cards for the opportunity to take a trip at a cheap rate, or buy a new piece of furniture that’s on sale.

But often these types of purchases really add up, in terms of interest. So, while you thought you were saving some money, chances are you will actually have spent more than you realized in the long run.

That’s where an Opportunity Fund comes in.

An Opportunity Fund is a savings account that you put money into for such off-the-cuff, out-of-the-blue expenses that you might want to take advantage of.

This way, you’re not racking up interest on a credit card, and you already have the money when you want it!

Learn more about how to set up an opportunity fund and why you might want one. It’s worth it!