Preparing For The Unexpected

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					Preparing For The Unexpected

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Short review:
While many people don’t like to talk about it unemployment is something very real that has the potential to be very damaging for
the ill prepared. Due to poor planning and denial, many people once unemployed find themselves in a severe financial struggle.
Credit card companies are calling them at home, at their old offices, and in some cases contacting them via mail and e-mail. So not
only are they being stalked by creditors they are also, more than likely, getting calls of r...


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credit card, credit cards, credit, creditor, charges, credit card charges



While many people don’t like to talk about it unemployment is something very real that has the potential to be very damaging for
the ill prepared. Due to poor planning and denial, many people once unemployed find themselves in a severe financial struggle.
Credit card companies are calling them at home, at their old offices, and in some cases contacting them via mail and e-mail. So not
only are they being stalked by creditors they are also, more than likely, getting calls of rejection from potential employers. What a
way to spend a day. So how can you keep yourself from being in a similar situation? The key to surviving unemployment or an
abrupt interruption in employment with out major blemishes on your credit report is setting up an emergency fund, and developing
a plan which includes purchasing credit insurance, and contacting your creditors to let them know about your situation. The first
thing that all households should do regardless of whether you have credit cards or not, is to establish an emergency fund to cover
your household expenses for up to six months. At a bare minimum this should include the sum totality of your mortgage, car loans,
credit cards, and student and other installment loans for six months. By having this emergency fund available in an easily accessible
form, like a savings account you can ensure that your bills are still covered for some time while you are seeking employment. Also
when you begin to apply for credit cards, you should look beyond the available credit, interest rate, and perks to the credit
insurance. Many companies now offer credit insurance that will cover your monthly payments for a certain period of time while
you are unemployed or temporarily disable. While you will still be accruing interest charges on your account during this time, what
you are concerned with and paying for is the protection that this insurance provides from negative markings on your credit report
from the 30 day, 60 day, and 90 day mark of nonpayment. In the event that your emergency funds run out or you don’t have one,
to at least ease the amount of stress placed on you from multiple calls from your credit card companies, you should be proactive
by contacting them and informing them of your situation. While this may not help your credit score, it will at least give you peace of
mind. Additionally, the companies may be more willing to work with you as you try to get things back together because you have
been upfront about your situation rather than avoiding them by screening your calls. At some point or another you or someone you
know may be faced with unemployment. When unemployment raises its ugly head, to ensure that you are left standing, you must
have a plan. This plan should consist of developing an emergency fund that includes enough money to cover your living expenses
including your mortgage, car, student and other installment loans, and monthly credit card payments for at least six months. In
addition to having this money available for a rainy day, you also need to be more forwarding thinking in your future actions. For
instance, any time you think about completing an application for a new credit card, you should consider purchasing credit
insurance as a back up plan in the event that you are out of work. While you may believe that your skill set will allow you to obtain
a new job within a week or so of being released, purchase the insurance any way in case you are wrong and your emergency fund
is not fully funded to last for six months.

				
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posted:7/3/2011
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