Household financial risks come in all shapes and sizes. Most families actually overlook most of them until they come crashing into their world! So what are some of the ones to look out for? From not holding the right insurance policies to ignoring your credit score, here are a few.
A Lack of Emergency Savings
Having some money in the bank is handy because you never know what will happen, and tragedy can strike at any time. No one thinks they will lose a job, get hit by a storm, or even be violently attacked. But these things happen! When you are a victim of something like this, you need backup cash to cover losses. But suppose you are hit by a car, then an auto accident attorney can help you win back some money from the fallout of a terrible incident.
No or Inadequate Insurance
Insurance is one of those things that you don’t like paying for, but it is necessary. It is best to have it when the brown stuff hits the fan, and it can be a lifeline in a terrible situation. At the very least, you should have medical, dental, and home insurance. There is a wide range of options that you can choose from these days, but always make sure you aren’t underinsured for your needs. It is also a good idea to get extra insurance, such as for pets, as vet costs are outrageous!
Household Financial Risks for Care
Around 70% of adults haven’t planned for long-term care, according to a report by This is Money. It is good to takefinancial steps to plan for your future, but how often does anyone really consider the care they might need, or a family member? People today are actually living longer, but age-related illnesses are increasing. That means it is likely that you or a loved one will need long-term care at some point, and this can be a massive financial burden without the funds.
Not Checking Your Credit Score
One of the best ways to relieve yourself of financial stress is to tackle it head-on. Planning your goals, making a budget, and saving what you can will provide a solid foundation to work from. However, you have more control than you think, and it’s often overlooked. Your credit score is a marker of how healthy your finances are in terms of debt. With services like ClearScore, you can get details of debt, advice for clearing it, and even products for increasing your score.
Informal or High-Cost Loans
Most people have had their share of tough times, and when times are bad, we can make unhealthy choices when it comes to finances. One of the biggest problems today is using informal or high-cost loan services. It won’t help anyone if you turn to a local loan shark, and it is exceptionally dangerous. Unfortunately, legal high-cost loan services aren’t much better. Services like pay-day loans know you can only pay the interest, which doesn’t clear the loan.
Summary
Not having any emergency funds is one of the biggest and most overlooked household financial risks today. Long-term care for you or a loved one is also very expensive, and most people don’t plan for this. And under no circumstances should you use a loan shark or a high-cost loan service.
(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)
