Emergencies and Money
An unforeseen emergency expense is exactly that. If you are in an accident or need emergency funds, how will you be able to cover it?
Spring is here, and many people are thinking about their summer travel plan. Some lucky folks will be jetting off to foreign lands and throwing themselves into dangerous situations that seem like harmless fun, but your summer break could turn into a real break — of the bone variety.
If you were to suddenly hurt yourself while climbing or kayaking, could you cover the medical bills? Learning to surf in Barbados or scuba dive in the Far East sounds lovely, but an emergency could be just one wrong turn or slip away.
The last thing you want is to be on a scooter in Thailand and need to be rushed to a hospital because you misjudged a corner on an island road. If you are leaving the relative safety of America, do you have everything squared away so that in the event of an emergency, you will be taken care of?
If you have comprehensive coverage, you can go and explore America safely in the knowledge that you can get a medical evacuation, and your insurance will cover it.
In the USA an emergency can cost about $25,000. However, if you are in Europe, the cost can be double that. If you don’t have travel insurance and decide to go on an adventure vacation, you may want to think again unless you have $50,000 lying about just in case you get hurt.
Emergencies aren’t just when you get hurt. If your car needs repairs suddenly, and you can’t cover it, that may lead to anything from missed appointments to losing your job. Getting an extended warranty on your vehicle may sound like a good plan, but the truth is that while you may get initial peace of mind from it, you could end up paying way more than the repairs over time.
Setting money aside and saving in case of emergency repairs is a far better plan. If you were to put the money that you would be paying into a third party warranty program into a savings account, you could end up with a chunk of cash that could be later put to other uses, as well as covering any repairs you may need.
There are exceptions to this rule, like buying a car with a warranty from the dealer which in turn can boost the resale value of the vehicle. Do your research, and work out the math for yourself before you sign anything.
IMPORTANT DISCLOSURES
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
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David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC