Lean financial times are hard and it can be harder to break a cycle of financial stress. I lived this as a college student who had to take several semesters off to work full-time to keep a roof over my head. As a young farm couple, my husband and I often had to make tough decisions about how and where we were spending and it sure didn’t take much to stretch things too far.
K-State Extension family resource management specialist, Elizabeth Kiss, offers some suggestions to assist in planning ahead of an emergency to help ease the burden of unexpected expenses. She shares the following tips to help families survive tough times.
Before an emergency: Build a fund
“If you don’t have an emergency fund, now is the time to start,” Kiss said. “Even a small amount adds up over time.”
Kiss said it has taken her 10 years, but saving $40 a month, she now has an emergency fund to cover about six months of essential expenses.
“The more cash you have, the less you will have to put on credit, which you’ll have to pay back with interest,” she said. “Ideally, you should save enough money to cover six months of expenses, based on what you spend in a typical month.”
Kiss also suggests reviewing your homeowner’s and health insurance coverage to make sure you have the coverage you’re expecting, and communicate with your family about your insurance policies.
“It’s also important to keep your important records safe,” Kiss said. “That should be part of your emergency plan. If you have to grab something quickly and go, you’ll have that information in a place where you can get to it.”
During an emergency: Use what you’ve prepared
“Use the cash you’ve saved if you need to purchase essentials, and contact your credit card companies and lenders if you anticipate a break in your payments,” Kiss said. “Or, you may want to request an increase in your credit availability.”
If the financial emergency is caused by loss of a job, Kiss suggests filing for unemployment benefits, “even if you aren’t sure if you’ll qualify.” Your community may also have physical and mental health resources.
“There’s often more help available then people realize,” Kiss said. “Food banks, housing assistance, even childcare and transportation services may be able to help. The amount of help may vary from community to community.”
After an emergency: Rebuild and re-evaluate
“If it’s a natural disaster and you’ve had property damage, you need to start making your insurance claims,” said Kiss, who cautioned homeowners to be careful of scammers trying to take advantage of those in unfortunate circumstances.
Afterwards, she adds, “prioritize how you spend the money that you have. You want to cover your basic needs – including housing, food and transportation – and think about how far your emergency fund can take you.”
If the home is affected, call the utility companies to turn off services during the time that you don’t need them.
Once you’ve spent down your emergency fund and are on the road to recovery, “start building that fund back up again for the next time, because there probably will be a next time,” Kiss said.
Michelle Beran is the 4-H and Youth Development Agent for the Cottonwood District, Barton County office. For more information on this article or other 4-H Youth and Development related questions email Michelle at mberan@ksu.edu or call 620-793-1910.
