Do you have a safety net to cover living expenses during unforeseen circumstances? Financial surprises like medical emergencies, sudden unemployment, or unexpected home repairs can be stressful.
Although everyone knows, on some level, the importance of having separate savings for anything unplanned, many people don’t have the means to cover a financial emergency. If you are in the same situation, it’s easy to let stress get the best of you. But don’t lose hope.
You can do things to handle better the costs you didn’t anticipate in your budget. We’ve put together some practical ways you can tackle emergency expenses to help you cope and get back on your feet immediately.
1. Evaluate and Prioritize Your Spending
Not all expenses are urgent and unavoidable. Consider a financial emergency the best time to evaluate and prioritize your spending. Since money is already tight, you must be more careful about your expenditures.
Take the time to list your expenses and sort them from highest to lowest priority. You might also need to trim or forgo unnecessary costs, such as entertainment, new clothing, or dining out. This will help you free up as much money as possible and accommodate the emergency expense.
2. Look for Extra Income Streams
Reducing or freezing unnecessary spending is a great way to get by until your finances can stabilize after dealing with a financial emergency. But you can also look for several ways to earn some extra cash.
It can be doing freelance work online or selling unused yet valuable items like electronics or exercise equipment. Besides helping you cover unforeseen expenses, finding additional income streams can help you not get into more debt or make significant adjustments to your existing budget.
There are all kinds of ways of making money online that you might not even be aware of. Some people even make money on the side by selling their foot pics if that’s something you’re into.
3. Explore Various Financing Options
Taking on debts might be the last thing you have in mind. However, the number of emergency expenses can be substantial. If you have to cover a sizable financial emergency, a loan is a quick option to get the cash you need.
Here are the top financing options you can explore when encountering urgent expenses, you didn’t expect.
- Payday Loan: Accessing online payday loans is a convenient way to pay for any financial emergency. This type of loan doesn’t require a credit check. Thus, you can get approved no matter your credit score. Depending on your lender, you can have the money, typically up to $1,500, deposited into your account within the same day.
- Personal Loan: If you need more than $1,500 and below $50,000, you can opt for a personal loan. It’s a lump sum you can borrow and have to repay in fixed monthly installments. Since this type of loan is flexible, you can use it for any purpose.
- Line of Credit: Provided that you can get a low-interest rate, a line of credit is an excellent alternative you can use to tackle unforeseen expenses. It’s a form of credit that works similarly to a credit card. There’s a preset borrowing limit that you’re allowed to borrow and withdraw anytime you need it.
Plan for Emergency Expenses Next Time
Emergency expenses can happen at any time. And while taking out loans comes in handy during a financial crisis, they are only a temporary solution. The best way to tackle unexpected expenses in the future is to plan for them. Start setting aside a small portion of your paycheck each month and build a safety net for any financial emergencies you encounter next time.