When I first asked “What’s Your Fallback?”, it was meant to be a one-off topic. But the more I think about this question, the more questions it leads to about one’s personal finances: How would you deal with the financial setbacks that happen in your day to day life?
A case in point:
Health Insurance [in most cases] is supposed to be a cashless facility. But looking at recent events, there’s really no guarantee and you might have to pay the bills upfront. So, what financial fallback mechanisms should one have in place to deal with such an event?
A couple of options that I could think of:
- A separate emergency fund meant solely for such major emergencies. This would be on top of your regular emergency fund and can be replenished once the claims are settled. I’m not sure if this is a good idea.
- Credit Cards. Would push you into temporary debt but can be paid off once the claims are settled.
What would you suggest?