This article was created in partnership with Western Union.
Accidents happen, but that doesn’t mean they need to have a negative effect on your finances. With a detailed emergency plan, you can protect yourself from unforeseen expenses.
For migrants in Italy, the dreaded phone call in the middle of the night can have huge consequences. If someone you love gets sick or has an accident back home, you can’t just drive across town — you need to buy a last-minute plane ticket and take time off of work. Maybe a relative gets into a financial bind, and you’re the only person who has the means to send money their way.
Outside of helping family and friends, you’ll also need to take care of your personal financial commitments in your home country. Perhaps your business requires immediate care or maybe your house floods or sustains damage in an earthquake. Any of these emergency situations will put a dent in your bank account and may even require your physical presence — there’s that expensive plane ticket again.
Planning for emergencies
These unexpected costs can wreak havoc on your budget. Here are three financial tips to prepare for and handle such emergencies.
1. Assess your financial risk factors
You never know when an emergency will strike, but you can prepare for it. First, assess the various risk factors in your life. Do you own properties or businesses back home? Are you supporting relatives who are in poor health or require expensive medical treatment? When you’ve listed these factors, consider any potential complications — not just the worst-case scenarios — that would require your time, your money or both.
Once you map out at least some of the various hazards, you can begin to create your emergency plan and determine how you would tackle certain roadblocks, especially when it comes to finances. An emergency plan can help you better understand the potential costs of emergencies and enable you to budget for these scenarios.
2. Save for an emergency fund
Stagnating wages and increasing expenses in Italy are making it harder than ever to save. According to the Commissione Nazionale per le Società e la Borsa’s 2018 report on financial investments of Italian households, the gross saving rate has been on the decline both in Italy and in the eurozone since 2014, with the Italian rate consistently below the European average.
Despite this gloomy outlook, it’s important not to throw your hands up in despair and forgo savings altogether. Start small by putting aside money that would normally go toward discretionary spending. Even saving five euros a day will begin to add up after a month or two. As your budget allows, slowly increase the amount you put toward your emergency fund. Soon, you’ll have enough to cover an unplanned trip home. It’s best to keep your emergency fund separate from any other savings. Otherwise, you could deplete this financial cushion as gradually as you built it.
3. Use money transfers
When emergencies crop up back home, you don’t always have the ability to hop on a plane and sort out any issues in person. One way you can help is by providing financial support to your loved ones, using your emergency fund.
A crisis requires fast action, though, and sending money through the mail or via a bank can take too much time. With the Western Union® app, you can send money home quickly and easily. It puts the money transfer process in your control, allowing you to send funds home at all hours of the day. So when that middle-of-the-night call comes, you only need to press a few buttons on your phone to help those you love most.
The best way to lessen the impact of crises back home is to create a comprehensive emergency plan. With your finances in order, you’ll feel prepared to handle anything that comes your way.