Tuesday, February 3, 2009

Alternate forms of Insurance

Posted By: Stephen Mills, Group 1A

When asked about ‘Insurance’ it is common for most people to immediately think of car insurance, health insurance, life insurance…etc. but what about insuring your family’s immediate needs in case of emergency? While most people are covered if they get in a car accident or have a health emergency, not many consider the fact that losing their job or income is just as big of an emergency that needs to be taken into consideration.

According to several different sources the following procedures should be incorporated into peoples lives to give them financial insurance if the worst-case scenario occurs and they lose their income. For instance one of the most basic recommendations to help people save money is to keep a minimum balance of five hundred dollars in their checking account. This is recommended to insure that checks don’t bounce. In many cases a check will bounce by small amounts of money from a minor oversight by the person writing the check. By keeping a buffer of five hundred dollars in your checking account it will prevent the bank from charging you for over drafting or bouncing a check which in the long run could save you a lot of money.

Another rule of thumb recommended by almost every source I stumbled across was to keep a minimum of the equivalent of three months expenses as an “Emergency Fund” that is only to be used in case of emergency. By doing this you are protecting yourself and your family incase you lose your income unexpectedly. This emergency money will give you a buffer if you lose your job so that you can have some time to find a new job without losing all your assets. Not to mention it will help with unexpected medical expected if any should occur.


Why you need $500 in the Bank.
Why I'm saving up $15,000 this year.
Emergency Money.

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