Financial planners ardently emphasize the need to establish an emergency fund. Even when income is tight, creating an emergency fund should not be neglected. Even small financial windfalls, such as a birthday gift or bonus, can help shore up such funds.
On top of creating an emergency fund, prudent households will carry the right kind of insurance to meet their current and future needs. This includes life, health, disability, car, and renter’s insurance. It also includes buying long-term care insurance, which protects against the need for expensive stays in nursing homes or health care facilities.
If it becomes necessary to dip into personal investments, avoid touching retirement accounts. In addition to harming a household’s future nest egg, dipping into these accounts can trigger penalties and income taxes.
About Frank LaRosa: A veteran financial services professional, Frank LaRosa is President of Elite Recruiting and Consulting, a placement firm focusing on the recruitment of qualified financial advisors throughout the United States.