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7 Things You Can Do If You Are Facing Unexpected Expenses

 

Money is our current method of exchange that allows us to obtain what you need to survive and to live.

Everything around us costs us money: the house we live in, the clean water we use, the electricity, the food, the clothes, even going out to eat or watch movies. The whole world revolves around money, and although it is often said that ‘money does not make you happy,’ the truth is, in reality, most people would disagree. People work for money in order to be able to afford goods and even the bare necessities. And if you are like the majority of the population living paycheck to paycheck, facing unexpected expenses can put a serious financial strain on you and your lifestyle.

Prioritize

Depending on your emergency expense, you can consider whether this is a priority and whether it needs financial action right now. For example, if your car broke down, but you are able to get to work either by walking or by public transport, maybe this expense can wait. However, if your pet becomes ill or injured, you may not be able to wait to save up money in order to pay the excruciating veterinary fees. In cases such as this one, you may consider taking out a temporary loan in order to support you meet the unplanned expense and not suffer the struggle of not having enough money to pay for other bills; experts at https://paydayseek.com provide you with a one-stop-shop where you can find loaners online. This way, it eliminates the hassle of looking for loan shops in your area as well as waiting in line or doing tiresome paperwork.

Reduce Your Expenses

If you have not already done this, consider what expenses you already have and where you are able to cut back in order to be able to afford your unpredicted expense, especially in these dire times. Many people spend money each month on things they do not absolutely require. If you properly review your expenses, you, too, are likely to find some areas where you can reduce your expenses and simultaneously afford your unplanned expense and necessary bills.

Use Your Emergency Fund

This idea is based on the assumption that you will have some money set aside for emergencies. That is because any financially literate adult will be aware that unexpected expenses happen at the least convenient of times. If you do not have an emergency fund, it is highly recommended that you get one as soon as possible. Everyone is able to save up some money, even if it is as little as $1 a month, if you cut back on some potential unnecessary costs you may have. The rule of thumb is that you can save up as much as the amount of equivalent to three months’ bills and expenses, which should be enough to meet unexpected costs.

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Use Your Savings

This tip also applies to those who have savings set aside. If you have a savings account that you can access without facing additional fees, using this money will be a better choice than to borrow money to pay bills. However, make sure that the money to pay for the unexpected expense is well spent and that it has not been reserved for another purpose, which could lead to additional financial pressure on you. You should also always check whether you will be penalized for withdrawal or if you will have to pay any additional fees.

Take Interest-Free Credit

Depending on what the unexpected expenditure is, you may have the alternative to pay using interest-free credit. As in the example previously given, if your car is beyond repair and you must fund a replacement, a dealer may agree to offer 0% finance to do this, which would significantly ease the financial burden. Nevertheless, as good as this option sounds, you must ensure you are cautious with credit and only borrow any amount you can afford to pay back, or it could lead you to serious debt.

Borrow From a Family Member

This option is often not ideal for most people, but if you have no savings and no money put aside and do not feel comfortable with the idea of taking out a loan or credit, this may be your only option. This option has some benefits as if you borrow money from your family, it does not usually accrue interest on the amount you have borrowed, therefore it is considerably cheaper. You may also not have to pay them straight away, and if you pay in installments, they may be flexible on the amounts you pay back. However, there are also some disadvantages to borrowing money from your family, which is the main reason why people decide not to do it. Owing money to a family member can put a strain in your relationship, and you may end up with financial issues and a broken relationship; therefore, you should consider other options beforehand.

Personal Loan or Credit Card

Another option you may have to consider if you have no access to other options to obtain the money you need to afford an unanticipated expense, then you may have to consider taking out a personal loan. Personal loans and credit cards allow you to borrow small quantities of money at a fixed rate of interest for over a fixed repayment period. Although this is a good option, it is more sensible if you have money aside and this should be a last resort.

Being able to afford an unpredicted expense, requires individuals to plan ahead, although this is not always possible. Hopefully, if you find yourself in this situation, following some of the tips above will support you.