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We all want to make sure we’re able to cope with an unexpected emergency. But many of us don’t know how to go about preparing for the infinite number of things life can throw at us. If you use the following tips in this post, you’ll have an action plan for confronting whatever life throws at you.
Take a look at these tips and see how you can begin preparing for an unexpected emergency today.
Step #1 – Check Your Budget to Make Sure Something Can’t Be Moved Around
The first step is to see if you can create a fund from your existing budget. I’ve always been big on staying on top of my budget so whenever an emergency comes up I can just move some things around and be good to go.
If you don’t check your budget, the chances are you’re missing out on a golden opportunity. And if you don’t already have a budget you should make one now to track your incomings and outgoings.
Step #2 – See if You Can Borrow the Money from a Friend or Relative
Sometimes the best way to handle an unexpected emergency is to see if your family and friends can help. Depending on what the emergency is, nearly everyone has someone they can turn to in times of need.
If you do find a family member or friend to borrow money from, make sure paying them back is your top priority. Sometimes it can even be helpful to make things official by writing everything down to both parties. Treat borrowing from a loved one with the same seriousness as you would borrowing from a bank. You don’t want to risk ruining a relationship over money.
Step #3 – See if You Can Make a Payment Plan
A lot of places understand that not everyone has the money to instantly cover an expensive emergency. Take an emergency dental appointment as an example. Ask if your dentist is willing to create a payment plan over a period. The majority will be open to it.
These payment plans work like any type of loan. You will have to make regular repayments and may have to accept interest rates. Some providers are better than others, so it pays to shop around before committing to any payment plan.
Just make sure that you’re getting good terms and conditions. Excessively high-interest rates and other poor clauses should be avoided.
Step #4 – Consider a Title Loan
Bigger emergencies sometimes require more drastic action. Your roof may have collapsed after a heavy storm or you have to cover some emergency medical bills. A title loan can be the perfect solution. Companies like Easy Choice Lenders let you use the title for your car as collateral for whatever you need.
Since this is a secured loan your credit score isn’t that important. Most decisions on loan applications are made quickly, so they can be used for life’s big emergencies.
Again, make sure you check out the terms and conditions of the loan. Don’t choose the first title loan offer you see because if you don’t make the repayments you can and will get your car repossessed.
Step #5 – Pick up a Side Hustle to Get the Money You Need
Have the time but don’t have the money? Then pick up a side hustle to get the money you need. My way of dealing with unexpected emergencies is to work even harder. As a freelancer, I pretty much control my income. Therefore, if an emergency comes up and I don’t want to pull from savings or take out a loan, I just work more hours to get the money I need quickly. Even if you can take out a loan or borrow the money I’d recommend picking up a side hustle to pay the money back as soon as you can.
You don’t have to have any specific skills to find a side hustle. You could try dog sitting with Rover, if you love animals. You could also try Code Load if you love shopping by sharing referral codes with family and friends. Every time someone signs up or shops using that code you get paid.
There are also freelance writing jobs available, which anyone can get into with a decent level of grammar. If you have specific skills, you could find web design, web development, and graphic design jobs online as well.
For many freelance jobs, it helps to make your side hustle a permanent fixture so you can guarantee regular work when you need it. These days freelancing is extremely competitive, and you need connections to secure an income.
Step #6 – Start an Emergency Savings Account
An emergency savings account is a bank account kept separate from the one you use for your normal expenses. I always cushion my emergency account whenever I have the chance. You don’t have to commit to a large amount each month, just whenever you have some extra income left after your expenses put it into that account and watch it grow from there.
As a general rule of thumb, try to set aside a month’s salary and keep building until you reach six months. The more you can put in your emergency savings account the better prepared you’ll be.
Think you can’t find the money to spare? Anyone can find some extra cents to place in their emergency savings accounts.
See Also: How to Get Your Finances on Track
Be Prepared for the Unexpected
Life can hit at any time and it’s important to be prepared for that. No matter your circumstances you should always have contingency plans in place for when things do go wrong.
The best thing you can do is to have your finances in order. Create an emergency savings account and include a place in your budget for building it up.
But if you don’t have the money to weather any storm know that you do have options, including negotiating a payment plan and borrowing from those around you.
Following these tips will make sure life doesn’t get the better of you.
What are your best tips for handling unexpected emergencies?