While not all unexpected events are negative, generally, the big ones that affect your financial future tend to negative surprises. This possibility of unexpected financial hardship means you may need to change the way you think about and handle your money. A little planning (and saving) now will make those emergencies and unexpected events much easier to handle when they come your way.

Prepare for the Unexpected

Even the most careful planner may be taken by surprise with an event that they had not planned or prepared for. The best way to handle these events is to prepare for the unexpected in advance. Build up an emergency fund to pay for an unexpected medical bill or house repair. Also, have some easily accessible, liquid cash on hand, just in case you need it in a hurry.

You can get insurance to cover your health, home, car, and your life. Healthcare coverage reduces the amount of out-of-pocket expense you will pay from an unexpected medical event. Auto and home insurance help offset the cost of an accident, fire, or damage from a natural disaster like a hurricane. A life insurance policy. protects your loved ones in the event of your unexpected death.

While you certainly can’t plan for everything, it is nice to know you have a contingency plan in place when things go awry. Keep in mind that once you experience an unexpected expense, you may need to reassess your current plan and make changes.

Start With an Emergency Fund

The first step for preparing for the unexpected life event is to have a solid emergency fund in place. Your emergency fund should be relatively liquid and should cover three to six months of standard living expenses.

If you are single, or you are a single-income family, you may want to consider building an emergency fund of up to a year. Having a year's worth of funds provides security for you and your family. This is especially important if you should lose your job and have a hard time finding another one, or suffer an unexpected illness where you are unable to work for an extended period and will have a gap in your earnings.

It is nice to know you have the money there while you are dealing with other issues such as job loss, illness, or anything that might affect your income. Remember, you do not want to be thrown off by small unexpected expenses.

Obtain Life Insurance

It is important that you have adequate life insurance to provide for your family. This will benefit your spouse—if you are married—and will provide for any children you have. When your family depends primarily on your income to pay debts, life insurance is doubly important.

The value of the policy's death benefit should provide enough money for your beneficiary to pay off debts after you pass away. If you have children you should get enough that it can help cover the cost of their education. It is vital that you have life insurance coverage if you have children.

Get Adequate Insurance Coverage in Other Areas

Additionally, you should make sure you have adequate health insurance coverage, and renter’s or home insurance coverage. While you may be adding bills to your monthly budget, having this coverage will save you in the long run.

Many people gamble with not having adequate health insurance coverage. They feel they are in good health and do not need coverage and will choose a low premium, but high deductible policy. However, accidents happen, and medical bills can add up quickly. All it takes is one serious illness or accident, and you could find yourself deeply in debt. If you are injured to the point you can no longer work it will compound the problem.

Plan for Natural Disasters

Depending on where you live, it may be wise to plan for natural disasters. Disasters include tornados, hurricanes, floods, forest fires, and earthquakes. They can come upon you suddenly, and you need to be prepared to deal with them. Consider which natural disasters are common where you live and talk to your insurance provider about the coverage you may need.

Additionally, a good emergency kit with a five-day supply of food and water is good to have on hand in your home, car, or office. The kits do not need to be very large or elaborate, but they can make a difficult situation much easier to get through. An essential element of your emergency kit should include a small amount of cash and a listing of your credit cards and other accounts along with the contact phone numbers.

Create a Backup Budget

Finally, you may want to sit down and create a fallback budget. The fallback budget should leave out the things you could cut back on or do without if necessary. This fallback will help you be ready in case you experience an unplanned financial event or a period of unemployment.

If you make the plan now, it will be easier to put it into place when and if the time comes. At the beginning of a crisis you may not be thinking clearly, and it helps to have a plan already laid out that you can follow.

Updated by Rachel Morgan Cautero.