To produce this note, we used our partners at Fairstone Financial.
“What can I do in a financial emergency? – Rest assured, we all find ourselves in this situation one day or another. Even if you are trying to prepare for the unexpected, it is more than likely that you are dealing with higher than expected expenses. Fortunately, our partners at Fairstone Financial have given us some tips on how to properly manage financial emergencies and unexpected expenses.
Cut in the fat to free money in your budget
Your budget might allow you more than you believe. Try to cut off any unnecessary expenses or small luxuries that you allow yourself during the month. Yes, you may have to sacrifice your restaurant outings, your morning coffee, or the new clothes you want, but what a relief it will be to be able to find money to meet your unexpected expenses.
Find ways to increase your income
An even more effective solution to your expenses is to make more money so you do not have to make big sacrifices. Depending on how much you spend, you can sell items that you no longer use, do freelance work, or even find a part-time job.
Home Owners – Take Advantage of the Equity in Your Home
If you are short of money, the value of your home can help you get a loan, but also a lower interest rate. A home equity loan or secured loan can help you deal with emergencies such as home or vehicle repairs, medical bills and more.
Credit cards for emergencies? Think about consolidating your debts.
While it may seem like a good idea to start, paying for your unplanned expenses with a credit card can mean a rapid accumulation of fees. Credit cards allow a short grace period of 21 days before interest is charged to your balance. Unfortunately, 21 days are often not enough to pay off your unexpected expenses, and if you did not pay your total balance, you could put your foot in an interest accumulation cycle.
If there is a balance on your credit card, a debt consolidation loan may allow you to regain control. In effect, you could pay less interest and become more confident that your debt is going down. Rather than making only minimum payments, you will repay your loan in a set number of installments, at intervals that suit you.
Prevent future emergency expenses
It is important to develop a plan to cover different types of unforeseen expenses. These may include repairs to your home or car, a salted dentist bill or even veterinary fees for a sick or injured animal. Your car accumulates repairs? Perhaps it would be cheaper to buy a new vehicle, or to use other means of transportation such as cycling or walking. Also, make sure your insurance deductibles are reasonable. Although your insurance costs may increase if you opt for a lesser deductible, this could be helpful if you are struggling later with damage or accidents. Speaking of insurance, do you know that they are not only useful for cars and homes? Indeed, a pet insurance can help you pay the bills or veterinary treatment of your animals.
Learn how to make your budget according to future financial emergencies
Fairstone Financial’s blog has many articles to help you prepare for financial emergencies and unexpected expenses. Here are some articles that might interest you:
– What you need to know about bankruptcy
– Set a budget for the new year
– How to reduce veterinary bills
Finally, be aware that the biggest mistake to make when it comes to unexpected expenses is to believe that they will disappear on their own. Although it may be difficult to recover from an emergency, it is better to make a plan and act as quickly as possible. If you face your expenses directly, you’ll be back on track faster than you think