4 signs you're more financially prepared for an emergency than you thought you were

Associated Press

There are four signs that your planning will help you weather the storm.

• It might feel like everything has gone sideways during the coronavirus pandemic, but you might be better-prepared for an emergency than you expect.
• If you have a full emergency fund and affordable options to borrow money if you need to, you're halfway there already.
• Plus, the appropriate insurance coverage will come in handy, from life insurance to health insurance.
• Bonus: If you're able to keep working towards financial goals during an emergency - staying the course with your investments and sticking with your goals - you're in excellent shape.
• Policygenius can help you compare life insurance policies to find the right coverage for you, at the right price »

Planning for an emergency can be tough - until it happens, you'll almost never know exactly what you need. But with your money, there are some basic ground rules for emergency planning, and if you've followed them, you're likely pretty well-prepared.

In fact, you might be better prepared than you even thought you could be. Here are four signs that your planning has put you in a position to make it through the worst.

1. You have a substantial emergency fund

In the event of job loss or a medical emergency, you can lean on your emergency fund, which most people want to cover three to six months' worth of basic living expenses. If you're truly prepared, you've bulked it up.

Personal finance expert and author of "I Will Teach You To Be Rich" Ramit Sethi is advising people not to stop at three to six months worth of expenses - he's suggesting 12 months. In a 'fireside chat' to followers on Instagram, Sethi said, "Now more than ever I believe that having that one-year security is really important," amidst expert recession predictions and tumult ous markets.

If your emergency fund has three to six months' worth of expenses, you're probably in good shape. If it has reached the 12-month mark, you might be better-prepared than the typical person.

2. You have an asset you could borrow against if you needed to

If you need to borrow money during an emergency, having an asset to borrow against could save you from the big cost of a personal loan, the high interest rates of credit cards, or long-term losses from borrowing from your 401(k).

Things like home equity loans and home equity lines of credit make borrowing cheaper by using your home as collateral. These types of loans and lines of credit are often much cheaper than a personal loan.

While having an emergency fund could keep you from needing to borrow in the first place, having these options can be a backup safety net. If you do need to borrow money, having this type of asset behind you could make it cheaper.

3. You're not worried about finding insurance coverage

In a global health crisis like the coronavirus, having the right life insurance and health insurance can bring big peace of mind, both financially and personally.

Many people are scrambling to get life insurance coverage in the wake of the coronavirus. Life insurers are seeing big upticks in applications for term life insurance policies, the most popular and affordable type of life insurance. Many people who often would put off signing up for a policy are finally making the jump. If you already have your coverage in place, you're one step ahead.

4. You're able to stay the course with your financial goals

If you're not worried about being able to continue saving or investing, you've probably set yourself up to weather the storm with ease. Whether it's saving for retirement or building a down payment on a home, your goals shouldn't change just because the economy did.

If you're well-prepared, you're not thinking too emotionally about your money, either: Now isn't the time to sell off investments, or make sudden changes out of fear. Keep saving, investing, and working towards those goals, and you'll be prepared to make it through the downturn.

• Read more on managing your money in this tumultuous time:
• 3 options for people struggling to pay their mortgage during the global health crisis
• 4 reasons to get disability insurance, even if you don't think you need it
• If you've been financially impacted by the coronavirus, you may be able to pause payments on these 8 bills
• How to get a stimulus check from the US government, which could pay up to $1,200 if you qualify
• In response to the coronavirus, credit card issuers like Amex and Capital One are letting customers skip payments without interest and more

Do you have a personal experience with the coronavirus you'd like to share? Or a tip on how your town or community is handling the pandemic? Please email covidtips@businessinsider.com and tell us your story.

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