The downturn of the worldwide economy has caused most of us to watch our spending. While you may be doing well to track your budget, unexpected bills and emergencies can quickly result in financial worries.
According to a study published last year, more than 60% percent Americans don’t set aside enough rainy day funds to handle minor emergencies. Just 38% of them said they’re in a position to manage a visit to the emergency room or a $500 vehicle repair with physical cash in a savings or checking account. 28% said they would either use credit cards or borrow from peers, and 26% said they would reduce spending on other items.
But you don’t need to cover an unexpected bill or emergency with credit. You can always manage the unexpected by taking the following measures.
Short-term online installment loans are designed for folks who want some extra cash fast to deal with unexpected bills and emergencies. They stand as a great alternative to the standard payday loans as they offer a simple repayment schedule that won’t require you to settle a big lump sum. You can either carry out a specific number of payments over the loan’s life or choose to pay it early and save interest, whichever is more affordable on your end.
Cut Back on Monthly Non-Essentials
Cutting back on monthly non-essentials and bills can help you cover the cost with ease. You can make simple changes such as ditching the pay-per-view TV package or taking coffee from a regular coffee shop instead of Starbucks on your way to work. These small steps can help you build an emergency fund reasonably quickly, so see where you can make savings by going through your expenses using a fine toothcomb. Also, you have the option to utilize online “cut-back calculators” to get an idea of how much you can save by cutting back on different things.
Utilize Your Savings
If there are emergency funds squirreled away in your account for a rainy day, you can always use them in the case of an emergency. While you will lose some interest by withdrawing your savings, the amount you lose is likely to be a better deal than what you’ll need to pay when you borrow cash to settle unexpected emergencies. However, cash ISAs and regular saver accounts often penalize account holders, so check if this is applicable in your case before withdrawing any sum. And again, compare what you’ll lose in the penalty against what you’ll have to pay if you borrow the cash to fill up your emergency fund – the former could be a viable option still.
Prolong Planned Purchases
Perhaps your budget can’t accommodate any surprise bills. However, you can piggyback your emergency fund onto other things you’re saving for. For instance, if you’re saving up to buy a car at the start of next year, you can reroute some of those savings towards your unexpected expense. While this means that you need to rebuild savings, you’ll be able to address priority issues when they arise. Work towards replenishing any savings you end up raiding for the rainy day. If this is something that can be mastered, it’s a great way to settle that emergency bill. Take these steps today to deal with unexpected expenses.