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If you’re showing interest in planning for an emergency move, chances are you’re already familiar with the fact that sometimes “life happens.”
If you ever find yourself in the midst of an emergency that requires you to move from one residence to the other, planning ahead for an emergency move can help you efficiently manage the arduous circumstance with ease.
How to Plan for an Emergency Move
Spoiler alert: planning for an emergency move is challenging. Emergencies are unpredictable, which is why preparing for one accurately can be difficult as well.
Nonetheless, we’ve listed several examples and expectations to consider below, that can help you create a solid gameplan in the event of an emergency move.
(Please note: a lousy view from your balcony or cranky neighbours doesn’t constitute as grounds for an emergency move.)
Make Sure You Have Insurance
One of the best ways to prepare for an emergency move is by having insurance. The best tenant, condo, or home-insurance quote can save you money over years of making regular payments and even include coverage on your belongings.
Evaluate Your Situation
Your property and its location play a massive role in determining the likelihood of an emergency—and what that emergency might look like.
For example, Ontario is susceptible to floods, as British Columbia is vulnerable to earthquakes. An emergency fund that prepares for water or building damage might help you avoid a world of headaches in the event of an incident.
Find Simple Storage Solutions
Many experiencing an emergency in their home, such as property damage, for example, will likely need storage space to protect possessions while they sort out new living arrangements.
Specific storage services, such as Second Closet, can arrange to pick up your belongings in a moment’s notice, store them, and facilitate a return to your new residence for a flat, affordable monthly rate.
Consider Alternative Accommodations
An emergency move might have to happen overnight, which means if you need to leave your residence, you’ll have to find a place to stay in the meantime. Accounting for potential living expenses is a huge advantage.
Many of us have family and friends that we can stay within our proximity, though this might not be a viable option for many. In these cases, subletting an apartment is an affordable alternative.
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Build an Emergency Fund
While no set figure can determine how much you’ll need during an emergency, a safe place to aim for starts at the $5,000 range and up.
The following section will delve a little deeper into one of the most critical aspects of financial planning: emergency funds.
What is an Emergency Fund?
An emergency fund acts as a financial safety net for unexpected expenses, often requiring urgent attention. Some examples of an emergency include an emergency move, sudden illness, or loss of employment.
In the general sense, an emergency fund should cover between three to six months of necessary living expenses, such as your rent or mortgage, food, and other unavoidable costs.
Since emergencies are usually unforeseeable, building a substantial fund before an emergency happens can alleviate many unexpected financial burdens down the line.
An emergency fund can also keep you financially healthy by avoiding the need to dip into your savings or rack up credit card debt, which will create a new bad situation as soon as the last one is over.
In the event of an emergency move, having an emergency fund set aside can help cover costly expenses, such as a repairing a burst water pipe or restoring a flooded basement.
Building an Emergency Fund for an Emergency Move
With proper planning and consistency, managing an emergency move can be an affordable and seamless process.
That said, there’s no better time than the present to start saving. With contributions as little as $50 a week, you can see your savings grow to $2,600 within a year.
Using a High-Interest Savings Account (HISA) can reward those efforts even further.
With a high-interest rate on a savings accounts at say, 2.80%, that $2,600 you saved will keep up with Canada’s inflation rate and earn $28 in its first year. The more you contribute, the more you’ll receive.
Another option is the Tax-Free Savings Account (TFSA). Like a HISA, a TFSA can also earn high-interest, without tax deductions.
Using a TFSA allows you to withdraw cash at your liking, with no financial penalty or withdrawal limitations, which enables you to earn untaxed interest.
Since money placed in TFSA Savings Accounts is accessible at your command, it’s an ideal account for all types of savings.
A TFSA is an outstanding account for an emergency fund. However, it does come with a yearly contribution limit. Though the limit increases every year, overcontributing to your TFSA will result in taxation.
Every emergency will inevitably differ from the next, but preparing for one will always make a bad situation easier to deal with.
On the other hand, if you don’t find yourself amid an emergency, you’ll have amassed an impressive amount of money, which is cool too.
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