Life is tough! Be Prepared


Life is tough. It throws unexpected challenges at us. Sometimes, we are ready and sometimes we are not. The risks associated with these challenges are a lot. Often, these risks and challenges require money.


Your car might break down suddenly and you may need Rs. 20 thousand to repair it. You may fall sick and the hospital bills may throw your budget out of the window. Most of us rely on a regular income to pay our bills and put food on the table. Our expenses and debt repayment are already consuming almost all of our income and there’s very little left at the end of the month. If in such a situation, an emergency comes, it becomes very difficult to arrange funds and stay afloat. Most of us would require to go into new debt to get out of such a situation.

What can we do so that we are prepared for these situations when they arrive? The answer lies in the question itself. Read again and you will realize that I said – “What can we do so that we are prepared for these situations when they arrive.  Yes, the point here is they will arrive at some time in the future. You car will break down, it is a machine, wear and tear will happen. Similarly, people generally fall sick and may need some time off from their jobs. What can possibly get you out of the hole is the anticipation that these things may happen. When you anticipate, you think of ways to get out of them.

There are many ways in which we can reduce the risks mentioned above. Get your car serviced regularly. This will reduce chances of a sudden break down and the mechanic will probably let you know if there is any part nearing replacement. We can mitigate the risk of losing our income during hospitalization by having a medical policy. This will take care of our hospital expenses and will not take our finances out for a toss. It is prudent to have medical insurance for every member of your family.

Similarly, it is prudent to have a insurance policy for all the working members of our family. Now, there are different types of insurance policy available in the market, I would suggest that you go for a term insurance policy. They are often cheap if taken online and provide sufficient coverage. Ideally, the insurance amount should cover 10 times your annual income. It is advisable to have a term insurance for every earning member of your family.

For small unexpected expenses such as replacing your TV, we should have an emergency fund. Now, the size of emergency fund should be assessed carefully. If you do not have any dependents, meaning you are earning and do not have to feed anybody else than yourself, keep three months’ worth of expenses aside. Add one month worth of expenses for every member of your family, who is dependent on you.

These basic steps such as having an emergency fund, having medical and term life insurance would probably keep you safe from any curveballs that life might throw at you.

Please let me know if you like this post via your comments below. Please share this post with your friends and family. It may help them.

About Abhishek 23 Articles
A personal finance enthusiast based in Bangalore, India.

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