Life is unpredictable. We tend to make sense of it after the fact and impose narratives that are convenient to our belief systems, but the truth is that it’s roiling chaos that’s impossible to predict. And unfortunately, the things that we’re least able to predict are also the ones that we’re least prepared to face.

Despite the above, many people feel like emergencies and catastrophic events are things that happen to other people. Too many of us sail through life not worrying or planning ahead, confident that we’ll be ok. But emergencies can hit with the speed of a lightning bolt, and are just as devastating. Today we’ve gathered together the top 5 reasons you need to prepare ahead of time for an emergency.

You Probably Don’t Have the Savings to Handle It

Studies show that most Americans only have enough savings to handle a $400 emergency before having to resort to credit cards or other loans. And while it’s understandable why so many have such shallow savings considering the economic realities of America, $400 is also, quite simply, not enough to handle most emergencies. Something as simple as a popped tire can wipe that money out, much less something as financially punishing as a healthcare emergency.

Emergencies Are More Expensive Than You Think

Building from the above point, many people simply have no conception of how catastrophically expensive essentially any type of financial emergency can be. They can also have long term effects that will last for years and sap any future financial gains you make. To give a few examples:

• Even a simple emergency room bill can haunt you for years, while if there are long term ramifications for your health you may have to pay out thousands for years to come.
• Getting fired or laid off not only brings your income to a screeching halt in the long show term, but in the long term can look bad on your resume to future employers.
• A car accident can put your car in the mechanic’s shop for weeks in some cases, meaning not only do you have to pay for repairs, but also that you lose access to your main mode of transportation, which can in turn make it hard to keep a job.

Your Income is Uneven

Something we often tend to forget, or just not factor into predictions of the future, is how irregular our income can tend to be. If you’re lucky that can mean bonuses, while if you’re not it can mean working a job with seasonal variance, uneven hours, or one largely dependent on commissions and sales. The economy is a constantly fluctuating thing, a vast roiling sea, and we merely ships bobbing up and down. If an emergency hits at one of the low points it can be utterly devastating and we may not have the resources to deal with it.

Credit Card Interest Rates Are Brutal

Credit cards can give us a false sense of security. After all, if an emergency hits you can just put it on the card, right? And while that is true, what it doesn’t take into account is just how brutal the interest rates on a credit card are. Interest rates can soar as high as 30%, but even a lower interest rate will gnaw away at your income the longer the credit card goes unpaid. Don’t be lulled into thinking you can depend on them in times of financial difficulty.

You May Not Know About Title Pawns

Title pawns are a type of short term loan that specialize in getting you cash when you need it. They’re also amazingly fast, with many customers stepping out within a half hour of arriving. This aspect of title pawns makes them perfect dealing with emergencies of any type. Title pawns are also highly accepting of all types of credit since the balance of the loan is secured with the value of your car (though of course you continue to drive it during the loan period).

To learn more about handling emergency expenses, read our other financial emergency articles.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.