4 essentials to keep money from destroying your future

Creating the family budget can be a pain, but if you account for worst-case scenarios, life will be much easier. Use this guide to help you plan for the unexpected.

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  • Even people with great budgeting skills can encounter unexpected expenses that throw their financial plans off track from time to time. Here are a few ways to plan for the unexpected and give yourself a better financial cushion for the future.

  • Think of worst-case scenarios

  • You don't have to become a pessimist, but don't assume things will always go your way. This is especially true with your expenses. Take some time to think about your current possessions, expenses, assets and liabilities. Think about big things like your car and little things like your favorite tennis shoes. Now imagine if all these things had to be replaced right now. How would you pay for this? Imagine some worse-case scenarios, and start building some extra padding into your savings.

  • Be insured

  • Insurance is supposed to be there when things get bad. Make sure you've got the right insurance to protect your most valued possessions, yourself and your family if things go wrong. Yes, insurance is an ongoing expense, but it will pay off if things ever go south.

  • Collect coupons

  • It's a well-known truth that there are coupons for almost everything. Coupons are a really easy way to reduce expenses. Think about things you get only occasionally but that you can't afford to go without. Now, look for coupons from the stores that carry these items. For example, you might keep coupons for a tire shop around in case you have unexpected car trouble. You can also find some of the best deals on car parts at Discountrue and other online coupon outlets. Also save big with groceries by using coupon clippings for items you buy every week.

  • Separate emergency funds from savings

  • You probably have a savings account already, which is key to having a sound financial future. However, most people treat their savings as a backup to their checking account. That means you dip into it semi-regularly for big purchases or in between paydays. This isn't a bad method, but it can hurt you if something really goes wrong and you need to use a lot more savings. You need a source of funds that isn't accessible for monthly expenses. Think about starting a separate account you won't carry an ATM card for or that has really restrictive withdrawal terms. Having this money blocked off from your normal spending patterns will mean it's there when you really need it.

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  • By definition, you can't predict the unexpected. But you know life will sometimes bring you hard times. To avoid big setbacks, it's worth it to factor bad situations into your financial planning, have solid insurance, store some good coupons and save a little more.

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Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most her time hiking, biking and gardening. She graduated with a degree in Journalism from the University of New Mexico and loves to use her writing skills in a variety of areas from family life to health and science topics. You can follow her on twitter @BrookeChaplan

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