A financial emergency isn’t something you can really plan for, is it? After all, you never know when one is going to happen, having some savings set aside for such an emergency is always going to be a good idea. But that might not always be enough to cover the financial impact of an emergency, there’s no resource guide to preparing for a financial emergency either. Because there are just too many variables to consider.
A financial emergency can take many different forms, after all, it could be something like your car getting damaged meaning you’ll have no means of transport. Or something that could be potentially more long-lasting like you lose your job, or you suffer a medical emergency. There are so many variables that having a way to deal with everything is going to be very difficult.
With things like a medical emergency or accident, you will often have more important things to focus on than your finances as well. However, your financial situation is still very important and can cause greater problems if you don’t get a handle on it quickly.
So, how do you deal with a financial emergency then? Well while there is no one guaranteed way to actually ensure you will always be able to deal with the financial implications of an emergency you can certainly help ease them. Below I’ve outlined a number of tips that will help ensure you will be able to at least lessen the impact to your finances.
Set Up A Savings Account
One of the best ways to ensure you will always have money in case of an emergency is to set some aside every month. You can do this is many ways, some people use money jars or spare change boxes and save up that way. But I find one of the ways to save money is to actually set up a savings account.
Set this up with your bank and simply place a portion of your pay check into it every month. You can even have this set up automatically by your bank if you prefer. By doing this is you can avoid the temptation to spend the money more easily. Best of all you’ll also get added interest by not taking money out of the account.
Set Up A Budget
Another great way to help ensure you will always have money in case of a financial emergency is to set up a budget. Allocate costs to everything like shopping, transport, equipment, and entertainment and then place whatever you have left into your savings.
Setting up a budget is a great way to help cut costs, if you think you’re spending too much money on your weekly shopping then by setting up a budget you’ll be able to take the opportunity to see where savings could be made. You could opt for cheaper brands or cut items all together to help save some money.
You could also find ways to be a bit more frugal instead of eating out for your lunch prepare it at home and take it in with you. And that’s just one example there are lots of ways you can live a more thrifty lifestyle and a budget will help you do it. The hard part is sticking to the budget and not being tempted it might sound easy, but it will require a lot of willpower.
Asking Friends or Family for Support
This is a divisive option and understandably isn’t an option for everyone and it depends on the nature of the emergency and of course the relationship you have with your friends and family. However, it is worth thinking about many people’s friends and families will be willing to help them out in an emergency if they can.
Although this will never be a popular option for the majority of people it can be a viable solution so at the very least it is worth considering. You might also be able to turn to the internet to help websites like Go Fund Me are used by many people who are suffering a financial emergency and need help. Of course, this will all depend on the nature of your emergency and there are of course no guarantees.
Apply For A Loan
Last but not least my final tip for ensuring you have a way to help lessen the financial burden of an emergency is to apply for a loan. This does offer some benefits many of the other methods won’t be able to match for one you can get all the money you will need (depending on the type of loan) whereas for many people their savings will only be able to go so far.
But it does come with the highest risks as well, if you can’t pay back the loan you’ll face repossessions and possibly even legal consequences. There are also many types of loans you could apply for, due to their speed many people apply for payday loans in an emergency to get money quickly.
It certainly understandable why they would do this, but the high-interest rates can be a difficult obstacle to overcome and while it might solve one financial problem it will usually cause another much larger one. Other types of loans worth considering are title loans which use your vehicle as collateral and base the amount you can borrow of the age and condition of it as well.
There are still risks but in general, they are a better alternative for many people and do offer many of the same benefits. Namely a quick application process and fast access to the money you need. You can also check out TopLoanCompanies.com for professional information on title loan providers.
Whatever loan you decide to apply for I would strongly recommend doing some research first and checking out professional advice and comparison websites. You should also try to be patient don’t rush into a loan straight away because it could end up causing further problems down the line.