This information came to us from Fran McDavitt with RE/MAX and made us ask, how many of us would be prepared if one of these situations arose? Prepare now to avoid the circumstance where an emergency would cause financial stress and avoid going into debt.

1. Your of your spouse loses a job. A job loss can happen at any time, and regardless of the situation, you should plan to have enough money on hand to cover your expenses for 3 to 6 months. This will keep your bills current while you cut back on expenses and look for a new employment.

2. Emergency medical or dental bills. Even in you have health insurance, emergencies, unexpected expenses and high deductibles can put you in a financial rut if you don’t have enough money saved to cover the bills. A healthy savings account can help you offset this.

3. Unexpected home or vehicle repairs. Repairs are inevitable, regardless of the age of your home or vehicle. Although homeowners or renters insurance and vehicle warranties may pay for many repairs, they don’t cover everything.

4. Tax-time surprises. The only time most people think of taxes is in April when they are due. While some people eagerly plan what they’ll do with their refund, others are surprised with a tax bill that is much higher than they had anticipated. Having the money in savings to cover the bill can help defray the financial shock.

5. Last-minute travel. This does not refer to the vacation kind either. This is travel related to the sickness or death of a loved one, or when you need to travel to an emergency fast. Having cash on hand to pay for the trip will prevent you from accruing credit card debt.

A good rule of thumb – tally your unexpected expenses for the last year and divide by 12. This is the amount you should put aside each month.