No one knows when an unexpected expense will come up. Whether it’s a car repair, a medical bill, or a home repair, these expenses always seem to catch us by surprise. And if you’re not prepared, they can wreak havoc on your finances.
But there are ways to prepare for the unexpected. Here are eight tips that can help you deal with unexpected expenses and keep your finances in order.
Try and be prepared with a cash cushion
An emergency “cushion” should be at least a couple of hundred dollars that make a big difference if you find yourself having to pay an unexpected bill or medical expense. If possible, try to have at least three to six months’ worth of income saved in an interest-bearing account. This will provide the most flexibility, with the least risk.
Furthermore, by maintaining this cash cushion, you can save yourself from having to borrow money or use high-interest credit cards. This will help ensure that your expenses are met without causing more debt problems.
Take a personal loan
You can cover unexpected expenses by taking out a personal loan, such as a payday loan or online cash advance. A personal loan is usually much cheaper than other types of loans, and you can get approved for one quickly.
You should apply for a personal loan when unexpected expenses arise. If your credit history is not so great, don’t worry, you can still take out a personal loan. It’s possible to find good rates for people who have less-than-perfect credit. The great news is that the process is often much faster than dealing with banks or other types of lenders. Additionally, there are no application fees or prepayment penalties associated with getting a fast online personal loan.
Borrow money from family or friends
Family and friends may be able to lend you money if your expenses are unexpected and you can’t afford them. Just remember that this is a personal decision that only works if you trust the person lending the money.
When borrowing from family or friends, you should agree on when they will be repaid. Also, consider whether you will be able to pay back the amount without causing strain on your relationships.
Negotiate your medical bills
Another way to deal with an unexpected expense is to negotiate your medical bills. Many Americans who have private insurance are unaware that they can ask for a discount on their medical fees, so it’s important to know your rights as a patient.
Many hospitals are willing to reduce some of the debt if you file the necessary paperwork. It is key to sit down with the billing department and negotiate these terms before paying your bill.
Be patient with your mortgage company
If you are struggling to make your mortgage payments, be patient with the bank or financial institution that holds your loan. Most of them are often willing to work with their clients when they are experiencing personal difficulties.
If you feel like you’re close to defaulting on your home loan, contact the billing department of your bank to set up a payment plan. Ask them about their policies and how you can make small installment payments until you are back on your feet.
Sell some of your things
You can get some quick cash by selling some of your unused items. Selling old jewelry, electronics, and furniture is a great way to raise money if you don’t want to borrow it from family or friends.
The good news is that there are many ways to sell your unwanted stuff these days. You can try using websites like Craigslist, or eBay, or even decide to organize a yard sale.
If you are reluctant to sell, you can pawn your items. Just keep in mind that you might need to pay a fee if you want to redeem them later on.
Look for some quick work
There are jobs that are paid on a daily basis, so you can get some quick cash if an emergency pops up. Working as a waiter or salesperson isn’t exactly what we’d like to do for a living, but it’s the perfect job when you need money fast.
If you choose to try and find a quick job, be sure to negotiate your pay before accepting the position because many employers will try to pay you less when they notice you are in a tight spot.
Ask for a paycheck advance
You can ask your employer for a paycheck advance so you can pay your bills. Be sure to do it in person and be honest about why you need the money because this will help them understand your situation better.
If you are hesitant about asking for money from your boss, just remember that many companies will agree to give you an advance if they see that you are struggling to make ends meet.
Promote a crowdfunding campaign
Crowdfunding has become a popular way to raise money these days. Many people contact their family and friends on social media to help them with funding for medical bills, funerals, or even going back to school after they lose their job.
You can promote your own fundraising campaign by creating an account at GoFundMe.com or Kickstarter.com, and sharing the link on your Facebook, Twitter, or LinkedIn account so other people can donate. This has the potential to be more successful if you have a large social media following.
Don’t spend on things that you don’t need
It’s a good idea to hold back on unnecessary shopping so you can avoid accumulating more debt. Try to focus on basic needs for now, until your emergency expenses are covered. This can be difficult because ads for online shopping are all over the place, but you need to try and fight the urge. Once you’ve saved some extra cash, you can try spending it on things that make you happy.
If you have a sudden expense that is throwing your budget off, there are many ways to get back on track. You can negotiate with the hospital, so they will reduce some of your medical bills if you provide them with documentation about how much money you make and why it’s been difficult for you to keep up with payments. Take care of your home mortgage by being patient when talking to the bank or financial institution that holds your loan. If all else fails, sell some of your things online or pawn them in order to raise cash quickly. There are also temporary jobs available which pay daily wages and might be worth looking into as well as asking for an advance from work where possible.
