Emergencies happen, and when they do, it’s always best to be prepared. But the reality is that being prepared is easier said than done for about 40 percent of all Americans. That’s right, it’s estimated that about 40 percent of all Americans don’t have $400 in the bank in the event of an emergency, meaning they’d either have to take out a loan, finance, charge or borrow money for something as seemingly simple as a new dishwasher.
That’s reality, which is why we’ve dedicated a lot of time on this platform to discussing ways Americans can become more financially sustainable and better able to absorb the blows that life can throw from time to time. But emergencies are one thing — catastrophes are a whole other thing. And if 40 percent of Americans can’t manage to scrounge up $400 for an emergency repair, we can only imagine how catastrophic situations may turn out to be for individuals and their families.
It’s part of the reason why we’re putting this post out there, as it covers three essentials that every American family should strive to have on hand and easily accessible in the event of a catastrophic situation. Here’s a closer look:
An Emergency Fund
Like we said in the opening, less than half of all Americans wouldn’t be able to scrap together $400 in the event of an emergency. What’s more is only about half of all Americans would be able to absorb a $1,000 unexpected expense. That’s a problem, yet making a commitment toward establishing — and sticking to — an emergency fund can help you absorb things like unexpected medical bills, appliance breakdowns, home repairs, car repairs and more. Minimally, you should have about three months worth of expenditures stowed away in this account (i.e., mortgage payment, utility bills, phone bills, car payments, etc.), which is usually more than enough to help you take on any unexpected costs.
A will
It’s estimated that more than 55 percent of Americans don’t have any sort of will. And while all Americans have to cite beneficiaries for things like life insurance policies, not having any sort of a will created can make the already sad situation of an unexpected death all the more agonizing. In addition to not knowing where any money or assets will be split, the lack of a will could lead to infighting among surviving family members that could result in a lengthy, expensive court battle. Having a will in place is one of the easiest and most affordable things that you can do to ensure that loved ones who live on after you are taken care of. Make one, make sure it’s notarized and enjoy the peace of mind that comes from it.
A Folder Full of Critical Information
This is one of the most important things that you can have easily accessible if there’s ever an emergency — a folder containing vital information. This folder should include account info, user names and passwords to things like medical expense accounts, stocks, retirement savings accounts, life insurance accounts and more. It should also include phone numbers of any emergency contacts or entities that a family member may have to get in touch with on a moment’s notice. Again, this sounds so simple, yet can become an afterthought when it comes to planning for an emergency. And yes, you may be able to hunt down this information over time, but in an emergency, time is not always of the essence and you may be in a fragile state of mind to know where to access it.
Reflect on your situation for a moment. How many — if any — of the aforementioned three essentials do you have at your disposal in the event of an emergency? Make it a point to get your situation in order in case the unthinkable were to happen. Doing so could make a bad situation run at least a little more smoothly.
