No matter how well things are going with your finances, an unexpected expense can put a serious dent in your bank account, leaving you uncertain about the wellbeing of yourself and your family.
If you’re still paying off debt or working within a small budget, the situation can become even more worrying.
Fortunately, with a little bit of know-how, handling the cost will be a breeze. In this post, we’ll let you in on everything you need to know about handling unexpected expenses. Vehicle repairs and job loss can happen at any moment. So, before we get started, let’s take a look at how you can prepare yourself for the next emergency expense.
Being Prepared For The Future
Building up your savings is key to being able to handle any expenses that get thrown your way. Even a measly £5 per day adds up to over £1,800 at the end of each year. This should be enough to handle smaller to medium emergency expenses. However, the more you can save, the better your long term financial situation will be.
It’s recommended that you have an amount equating to three months of bills available either in cash or an instantly accessible savings account – preferably one that earns you interest on your savings. Once you’re sitting on over six months’ worth of savings, consider investing some of it, depending on what you’re comfortable with taking out.
This will afford you the peace of mind you need and allow you to focus on other important aspects of your finances, such as budgeting. Now that you know how to prepare for future expenses, let’s tackle the current ones.
Taking Out A Loan
Not everyone has the luxury of being able to ask for interest-free loans from family members. This is when turning to a suitable loan company is your best option for immediately paying an emergency expense. One generally only needs an average credit score in order to qualify for a personal loan in the UK.
The company TrustTwo Loans is a local direct lender that offers a unique option known as a guarantor loan. This leverages the security of a guarantor (such as a friend or family member) in order to provide you with the ability to have someone else pay what’s due when you can’t afford it. There are no upfront or late repayment fees and loans are tailored to your budget.
Be sure to determine your ability to repay the loan before going through with it. If you aren’t confident that you can make the repayments, avoid ruining your credit score and continue exploring other options until you find a loan that is suitable for you.
Sell Some Stuff
While it may be difficult to let go of your mint condition action figures or gaming console, these material objects are nowhere near as important as your wellbeing and that of your family. If your emergency expenses threaten your livelihood, taking such a measure is more than necessary.
In order to sell your stuff more quickly, post them up on local classifieds websites. Thousands of people browse these every day and they’re usually free to post on. Use social media to further increase your chances of a quick sale and don’t allow someone to negotiate you down to an unfair price.
Increase Your Income
Thanks to the growing number of opportunities on the internet, it’s become much easier for anyone with a particular skill to make a quick buck using their computer. If your emergency expense doesn’t need to be paid urgently enough to warrant a loan, consider increasing your income by doing some online work.
If you’re a good writer, you can find businesses or individuals who need content written for their website. If you have some artistic skills, check out some of the countless ways you can turn your talent into money. The same concept applies to photography, coding, video editing, transcription, tutoring, and even testing games or software for money.
A few minutes of research is all you need to find a countless number of websites where you can earn extra money to cover your emergency expenses. Even if you’re struggling to find a skill or talent to make use of, you can earn less but still considerable amounts of money from things like surveys, product testing, and micro-task websites.
It won’t be easy to earn more than a few hundred pounds per week without investing significant amounts of time, but these small amounts add up and will go a long way in helping you settle any debt that you’ve racked up from paying for your emergency expenses.
No matter how dire the situation, keep a cool head and don’t let your mind race. Now that you know how to prepare for next time, you can be rest assured that this emergency will be the last one to ever give you a headache.