Want to be Safe from Financial Risk? Here's How

• Financial planning is one of the important things in achieving life goals. But keep in mind, apart from that we also need to understand a risk that has the potential to occur in the future, such as loss.
  So, it is important to have an anticipation that is prepared from the start in doing financial planning.

As is known, financial risk is a risk whose impact can be assessed or measured in money. Based on the time period, financial risk can be divided into short-term risk and long-term risk.

Short-term risks arise unexpectedly such as experiencing illness, loss or damage to productive assets.

This condition makes us unable to work as usual for a while or requires additional costs such as costs for treatment or repairing something that is damaged.

Furthermore, long-term risk is unforeseen circumstances that cause long-term financial losses. For example, the risk of death.

For a family breadwinner, death causes the loss of the main source of income in the family.

The following are solutions and anticipate financial risks that can occur at any time?

1. Use Insurance

Insurance is needed to cover a risk, especially in life. If you are worried about the risk of death, you can buy Life insurance. Meanwhile, for productive assets, you can use vehicle insurance.

Center of Economic Reform (CORE) economist who is also an insurance expert, Piter Abdullah once said, insurance has great benefits in an uncertain life. So it is important for us to have insurance to cover a risk.

"Life is uncertain and of course there are risks. So insurance is needed to cover risks and just in case," he explained.

The following are solutions and anticipate financial risks that can occur at any time?

1. Prepare an Emergency Fund

Anticipate other risks that can be done apart from insurance, namely you can also prepare an emergency fund early on.

Emergency funds are the most important part of personal financial risk management. As the name implies, emergency funds can be used at critical times or when we experience an unexpected disaster.

For emergency fund storage, you can save funds into financial products that are safe and easy to disburse, such as savings. If you are hit by a disaster or disaster that requires large funds, you have the ability to use these emergency funds quickly.