Certain life events may scupper even the most intricate plans. Unexpected occurrences such as sudden illness, an accident, or job loss, can wipe out your finances very quickly.

As Scottish poet Robert Burns put it, “The best laid schemes of mice and men often go awry.”

While nothing is ever guaranteed (except death and taxes), there are three tactical moves that you can make to minimize the damage in the event of any unexpected disasters:

Build an emergency fund

Although it would be nice to put all of your savings in high-yielding investments, these types of investments are usually the most risky. You should instead put around three to nine months’ worth of your regular income aside in a liquid bank deposit for any sudden, unexpected emergencies. This money won’t earn much interest, but you can draw on it whenever you need it fast – such as when your refrigerator suddenly dies, you need to pay an emergency medical bill (Did you know medical bills are the leading cause of U.S. bankruptcies), or you find yourself out of work for a month or two… or 10! By having cash easily accessible, you save on the cost of borrowing money or selling an asset at a loss, just because you need cash now.

Budgeting

As prevention is always better than a cure, do your best to live within your means.

Monitoring your spending helps you to avoid debt and keeps you away from financial checkmate. Keep an itemized list of your expenses, and see if there is any way to maintain your current lifestyle at a lower cost. For example, switch to a less expensive telephone company or buy your vegetables at the farmer’s market instead of from an expensive grocery store.

Insurance – a gift for your loved ones

If you’re young and reasonably healthy, you may think that insuring your life isn’t really necessary at this point as nothing is likely to happen to you. Hopefully, you’re right. But unfortunately, this isn’t always the case. Accidents happen and people fall sick at any time in life. For this reason, and especially if you have a family, you should take out a life insurance policy. Ideally, this should also include a disability clause so that if for any reason you are physically unable to work, your family will receive some kind of financial assistance.

It’s not difficult to take these steps. Once you begin following them, you’ll find it is easier to make more complicated financial changes. Financial guru Dave Ramsey even refers to them as baby steps. To find out more about how to follow them, read this.