Finance, Forex and Investments

What is a contingency plan used for in personal finance?

I'm having trouble finding out how a contingency plan works in personal finance. I've tried dozens of websites, but no luck. Any help would be greatly appreciated. Thanks

Public Comments

1. A contingency plan is a plan that relies on meeting some goal or not meeting it. Personal finance examples would be: buying a new car if I get a raise, buying a smaller house if my raises are small in the next few years, relying on savings to pay bills and cutting unnecessary spending if I lose my job.