When you think about being ready for any emergency, most people will consider issues like making sure they have a first aid kit in the cupboard, fire blankets readily at hand, and, if you live in a flood area, sandbags at the ready. However, most people tend to forget the aftermath of emergencies. No matter what happens, you can pretty much guarantee it will cost money to repair or replace.

In simple terms, it isn’t enough to be ready for anything in a physical sense - you also have to be ready in a financial sense. And the reality is that financial emergencies can occur in run-of-the-mill situations and on a highly regular occurrence. Your car could break down tomorrow, or you might injure yourself and face high medical bills. The truth is you just don’t know what will happen - but you need to be prepared.

I’ve covered how to stop worrying about money before in this blog, but preparing for financial emergencies is a separate - and far more important - topic. Here is everything you need to know about building the financial foundation to prepare for anything. As they say, better safe than sorry.  Let’s get started right away.

Build an Emergency Fund

The first thing you need to do is to start putting money away in a specific savings account - to be touched only in the event of an emergency. Financial experts say you need between 6-9 months of living expenses to consider yourself safe from the vast majority of situations. This should be enough to help you through the tough times if, say, you were to be made redundant or perhaps face an unexpected illness and all the medical bills that go with it. Sure, 6-9 months sounds a lot, but once you get started squirreling away your spare earnings, you will be surprised at how quickly it takes.

Establish Safety Nets

Do you have people who could loan you money in times where you have nowhere else to turn? Some companies offer quick loans with no credit checks, but these can be expensive in terms of interest rates. It can be cheaper - and better for you in the long run - if you could identify a couple of family members or close friends that would be happy to lend you money in the event of a disaster. Offer them a higher rate of interest than they get in their savings accounts, and establish a payback period. It will cost you less money than borrowing from a mainstream lender, while they earn more than they would get in their usual savings account - and everyone wins.

Keep Records

Don’t forget that if you do need to release cash, you will need things like documents to prove who you are. Imagine your home is affected by flooding and all your important documents are washed away - or destroyed. How will you be able to prove you are who you say when the time comes to withdraw or borrow money from a bank? It’s a good idea to keep original documents like property titles, insurance policies and birth certificates somewhere completely safe. Try your local bank and use a safe deposit box.

The Vital Stash of Cash

Although fewer people are using cash these days, don’t underestimate how important it is. If you are caught up in a disaster, you may not be able to use your cards in local stores, or even access an ATM if the power goes down in your local area. So always have some cash on hand to keep you going for a few days at least. Again, make sure this is stored somewhere completely safe - and don’t succumb to the temptation of spending it!

Keep Up to Date With Insurance

When was the last time you updated your insurance plan? Few people actually bother, and some never do. But here’s the thing. Let’s say you move into a new house. You insure all your possessions and everything is OK. But as you build up your possessions, you have to tell your insurance company or you may invalidate any claim you make in the future. It’s also important to keep all of your insurance information - policy numbers and agent information included - in a safe place.

Target Your Debts Sooner Rather Than Later

Your debts may be entirely manageable right now. But what happens if there is an emergency tomorrow? Or what if you suffer from an injury? Or lose your job? Will those debts still be sustainable? Many sensible people have suffered a great deal by not focussing on their dates when they can, and end up in serious financial trouble when they realize that they can’t. In an ideal world, you should keep your debts down to around a third of your excess income, at the very most.

Budget, Budget, Budget

By now, you should probably have realized that you need to have a reasonable grip on your finances. It’s simply critical to ensure you are budgeting properly as a household. Use spreadsheets, accounting software, or whatever you feel comfortable with, and track and trace every cent that you spend. At first, it may feel like overkill, especially if you have been a little loose with money in the past. But if you know your financial situation now, you will be in a better, safer place tomorrow if there is an emergency.

Check Your Credit and Accounts

Finally, there is another sort of emergency that we haven’t covered yet - fraud. In this modern age, there is a multitude of ways that fraudsters can harm you, from stealing money electronically from your bank through to using your identity to claim credit cards and loans. And the reality is that you may not find out if you are being defrauded until it is too late unless you are keeping close tabs on your financial situation. That means checking your bank on a regular basis, and also keeping abreast of your credit score. Not only will doing this help you avoid fraud, or at the very least, react to it sooner, but it will also help you see when you are overspending.