What are the benefits of financial preparedness? How can you improve your personal financial plan in order to be better prepared for life’s unexpected expenses?

Being financially prepared for the many situations that can occur in our lives can offer stability and reduce stress. There are things that happen that are unexpected and out of our control, many times these situations can be costly. These situations can range from something small such as a flat tire or household repairs to something big such as loss of employment or divorce. No matter the situation having money put aside for “just in case” can give you the assurance you need to not end up in dept from unexpected credit card charges.
In order to be better prepared for life’s unexpected expenses you need to form a personal financial plan. When creating a financial plan you should begin by analyzing you financial situation. Knowing how your income compares to your regular living expenses will allow you to develop plans for savings. Setting up emergency funds for those unexpected expenses will keep you prepared. While saving can much more difficult then using a credit card it will benefit you in the long run. Credit cards build interest that may take a long time to pay off, many times another situation will arise before you are done paying the interest of the first. With money in a savings those emergencies will not incur any additional fees. Setting up goals to put aside saving in the occurrence of a financial emergency will help you to be more prepared and less likely to fall into dept.