Financial preparedness refers to the ability of individuals and households to weather financial storms and unexpected events, such as job loss, illness, or natural disasters, without falling into financial distress. Being financially prepared means having the necessary savings, insurance, and other resources in place to deal with these types of situations.
The importance of financial preparedness cannot be overstated. In today’s uncertain and rapidly changing world, it is critical for individuals and households to be financially resilient in order to achieve long-term sustainable security.
Why Financial Preparedness is So Important
Helps to avoid debt
When unexpected financial emergencies occur, individuals and households may have to resort to borrowing money to cover their expenses. This can quickly lead to a debt cycle that is difficult to break. Being financially prepared, however, can help individuals and households avoid debt by having enough savings to cover expenses during tough times.
Sister Barbara W Winder, general president of the Relief Society, say that “provident living includes the prudent, frugal use of one’s resources, making provision for the future as well as providing wisely for current needs”.
Provides peace of mind
Knowing that you have enough savings and resources to handle unexpected events can provide a sense of security and peace of mind. This can help reduce stress and anxiety, and allow individuals and households to focus on other important aspects of their lives.
Protects against financial shocks
Financial shocks such as job loss, illness, or natural disasters can have a significant impact on an individual or household’s financial well-being. Being financially prepared can help protect against these shocks by providing a cushion to cover expenses until a new job is found, medical bills are paid, or repairs are made.
Enables long-term financial goals
Financial preparedness is also important for achieving long-term financial goals, such as saving for retirement, buying a home, or paying for a child’s education. By having the necessary savings and resources in place, individuals and households can stay on track with their long-term financial plans even during tough times.
Solutions
So, how can individuals and households become financially prepared? Here are some key steps:
Build an emergency fund
An emergency fund is a savings account specifically for unexpected events. Aim to save enough to cover at least three to six months of living expenses.
Get insurance
Insurance can help protect against unexpected events, such as illness, disability, or natural disasters. Make sure you have adequate coverage for your specific needs.
Reduce debt
High levels of debt can make it difficult to be financially prepared. Focus on paying down debt, starting with high-interest debt first.
Create a budget
A budget can help you stay on track with your finances and ensure that you are living within your means.
Invest for the long-term
Investing for the long-term can help you achieve your financial goals and grow your wealth over time. Make sure you are investing in a diversified portfolio that matches your risk tolerance.
In conclusion, financial preparedness is a critical aspect of long-term sustainable security. By having the necessary savings, insurance, and other resources in place, individuals and households can weather financial storms and unexpected events, avoid debt, and achieve their long-term financial goals. Taking steps to become financially prepared can provide peace of mind and help ensure a more secure financial future.
Resources
The emergency Financial First Aid Kit is available for free from the Federal Emergency Management Agency (FEMA) call 800-480-2520 and ask for publication number P-1075. It is also available as a free download online at www.ready.gov/financialpreparedness and at www.operationhope.org.
https://www.ready.gov/financial-preparedness
https://wallethacks.com/how-to-create-your-financial-emergency-plan/
https://redcross.org/content/dam/redcross/get-help/pdfs/disasters-and-financial-planning-guide.pdf
https://www.afcpe.org/financial-preparedness/
https://www.wellsfargo.com/topics/review-your-financial-emergency-plan/
EMPLOYMENT
https://providentliving.com/preparedness/
https://hr.az.gov/content/job-opportunities
https://www.indeed.com/l-Mesa,-AZ-jobs.html
https://arizonaatwork.com/maricopa/about
https://arizonaatwork.com/locations/maricopa-county