Each one of us will have to deal with a financial emergency at one point in our lives or the other. If you haven’t had one yet, then count yourself lucky. However, you’ll most likely have to deal with one in the future.
What are financial emergencies? They’re unforeseen situations that end up costing you a lot of money. Examples of financial emergencies including needing a car repair after a road accident and needing surgery after an unexpected injury. Even smaller scenarios like late credit card payments, temporary unemployment or rent trouble can be counted as emergencies as well.
If you don’t deal with these situations the right way, then you might end up having to suffer for a long time afterwards. So here are some excellent tips to help you tackle financial emergencies:
This might be very hard to do but it is absolutely necessary. When you start panicking, the likelihood of you making a terrible financial decision increases. So if you don’t calm down, you might actually end up making the situation much worse.
So when you receive the bad news, do not rush to action immediately. Instead, work on staying calm and work out an attack plan to deal with this. If you have a family member or a friend who is good at accounting and finances, we highly recommend asking for their help.
Plan Out A Way to Borrow Money
During financial emergencies, you often have to borrow money. Hence, it is a good idea to plan out a few borrowing options beforehand. Perhaps you could strike a deal with a close friend or family member. You could get in touch with a few local places that offer same day loans and choose the most reliable ones out of those. When borrowing, be well aware of things like interest rates and repayment amount and period.
We also recommend keeping some amount free on your credit card so that you can use it during an emergency.
Prioritize How You Spend
During a financial emergency, money is definitely going to be tight and unless you prioritize your spending, you might potentially end up in a lot of trouble. We recommend that you figure out what expenses are the most important and make a list. Usually these include:
- Debt like mortgages and car payments
Once you’ve done this, you can figure out where you can cut your spending. Technically you could slash anything that’s not on the list but with a few temporary lifestyle tweaks you could reduce spending on things like gas, food and utilities as well if necessary.
Find Ways to Make Some Extra Money
Some additional money can absolutely help you deal with an emergency much better. There are a few ways to earn some quickly:
- Odd jobs – if you’ve got some time why not go around the neighbourhood and offer to do things like mow the lawn and clean out the pool?
- Sell things online
- Pawn off a few items
- Sign up for some overtime
With these four tips, you’ll find that you can deal with any financial emergency that life throws at you.