A lot more people who generate an income either through their job or as entrepreneurs often find that they’re really just living on the brink. Sure, you manage to pay all your bills quite comfortably, cover your living expenses and you generally have a firm grip on any debt you might have, but what would happen if a major expense hit you as a result of some or other emergency?
For many people it’s a rather sad reality that something like a major medical emergency or something like your car experiencing some serious problems would make for a serious financial setback, if not an outright financial ruin that would take you years to recover from.
It really doesn’t have to be that way though as there are a number of options you have available to firstly protect yourself against major life emergencies resulting in financial ruin, and secondly, deal with them as they unfold so that you don’t go into financial ruin. Heck we could probably even add a third option, which will help you minimise that kind of financial ruin that proves to be inevitable and slowly pull you back out of it so that you can function normally again.
Saving and investing
The best approach to making provision for a cushion you might need should a rainy befall you financially is indeed to put some money away in savings. There is perhaps no greater feeling when it comes to finances than that of being able to pay for something you want or need in cash, without worrying about that affecting your livelihood going forward.
Unfortunately though putting money away in traditional savings is not enough anymore these days, unless of course you have a mega cash surplus. Investing money for a rainy day is the way to go these days, at the very least aiming for returns that match or beat inflation.
Although insurance companies make a serious killing via the insurance premiums they collect and invest for growth, the service they offer can come in very handy in offsetting and preventing financial emergencies that could otherwise ruin you. Imagine not having auto insurance for example and you get involved in a car accident in which your sole mode of transportation to get to work gets totally wrecked and is written off.
Contingency services are those which you can make use of in the very moment that you’re faced with some or other financial emergency which would have otherwise proven to be very expensive. If you don’t have a certain amount of money for a criminal defence lawyer, for example, you would otherwise probably be willing to get into debt in order to avoid the consultation fee, simply because you cannot do without their services. The same applies to something like hiring the services of a car accident lawyer, but looking towards contingency services through which free consultations are offered, then you can off-set the need to fall into debt just so that you can cover the costs of your emergency.