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Unfortunately, life will encounter seemingly insurmountable difficulties. Sometimes, the tragedy of life has a price tag, an expensive tag.
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Imagine that your child is fighting against a tumor. Despite the insurance, you have to pay $25000 for medical treatment. If your child takes drugs? Have you checked the drug rehabilitation fee? How do you raise the money? The following suggestions may help you overcome man-made tragedies financially.
- 1. Plan ahead. The safest way to deal with the crisis is to have a large amount of cash reserves. It is your goal to prepare a one-year buffer fund. This buffer fund can resolve all kinds of crises, allowing you to focus on the human issues rather than financial issues of the crisis.
- 2. Purchase insurance as much as possible. You cannot insure against any risk, but you still have many options. Don’t resist risks you can’t take. Talk to your insurance agent today.
- 3. Use of pensions. Don’t change your pension after a car accident – this is not a real crisis. Don’t use your pension to pay for cosmetic surgery – it’s not a crisis. However, in a real emergency, you can unconditionally borrow money from the 401 (k) Retirement Benefit Plan. You can also withdraw cash from your IRA regularly, but you have to pay 10% fines and taxes.
- 4. Mortgage the property. Real estate appreciation is fast. Unless the situation is serious, mortgage is not a wise decision, which will bring risks to your life. Don’t mortgage your property just to buy a new car or take a vacation. Don’t mortgage your house to repair it – it’s only for others to see. In a crisis, if you can’t borrow money from the 401 (k) retirement benefit plan, your house is a refuge.
- 5. Try crowdfunding. There are countless websites that help people raise funds from friends for various projects, from film projects to charity. GoFundMe focuses on helping people raise funds from friends in times of crisis. You will be surprised by the help your friends are willing to provide when you are in trouble.
- 6. Make a plan. For example, if you spend a lot of medical expenses to cure your illness, but leave a pile of debts, you should make a repayment plan with your medical institution. If you are already destitute, they have no choice but to accept your plan.
- 7. Consider applying for personal bankruptcy. If the child is seriously ill, applying for personal bankruptcy can not provide you with funds to send the child to the rehabilitation center, but it can terminate the debt collection call and the pain caused by huge medical expenses. If your assets and income are not enough to repay the debts incurred after the crisis, talk to your bankruptcy lawyer. Careful living can help you avoid bankruptcy, but sometimes you have no choice but to make no mistakes.
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Solving the financial problems related to the family crisis seems scary, and any discussion about money feels like salt on the wound. Do your best to implement the first six items of the above plan, and you can roughly avoid the seventh item. Although it seems unbearable, you can survive.
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