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Today’s post comes courtesy of fellow S&S reader, Jo. Check out her tips for dealing with unexpected expenses.
Dealing with an Unexpected Expense
If there is one thing that the coronavirus outbreak has taught us all, it’s that we can’t always be prepared for what’s ahead, and that life won’t always follow our carefully laid plans.
Most of us had things to look forward to this spring, plans laid out, and things booked for us to prepare for. Few of these plans would have involved a national lockdown and half of the people on Earth living with some form of restricted movement. But, that’s what we’re doing.
The unexpected sometimes happens at home, as well as on a global level. Unexpected expenses often crop up at the worst times (right around now!), and one of the first things that we are likely to do is panic. Below is a look at some of the ways that you can cope with an unexpected expense at home.
Question the Expense
Some expenses simply have to be paid; there’s no way out of it. But, this isn’t always the case. If you receive a bill that you aren’t sure about, or seems a little too high, get in touch with your provider to make sure it’s right. You certainly wouldn’t want to spend more than you need to. For example, if you receive a 21453 a vc red light ticket, do some research before paying, to see if you could avoid the charge.
Keep a Rainy Day Fund
The best way to cope with any unexpected expense is to have a rainy day or an emergency fund. Even if it doesn’t cover the whole expense, it will give you a big boost, and help you to limit the damage.
It might be too late now but prepare for future expenses by making sure you start to put a little aside when you can. You might want to try a savings app to make things easier to manage.
Explore Your Options
Panicking clouds our judgement, and worrying about money often makes us feel trapped, and like we’ve got no reasonable way out. Chances are, you’ve got more options than you might think. Look at payment options, and consider creative solutions. Maybe a 0% APY credit card could cover the gap. Or maybe you have a few things laying around the house you could sell to cover the expense.
Give Yourself Time to Make Decisions
Take your time. Don’t rush into any decisions, as when we rush; we are more likely to do things that we regret later. Unexpected expenses may pop up quickly and without warning, but you’ve usually got a little time before you need to make payments to think about what you should do for the best.
Use Your Savings Before Turning to Debt
Having savings is a waste if you are paying high-interest on debts. It’s better to dip into your savings than to get into high-interest debt, which could cost you far more in the future, hurt your credit score, and trap you for years to come. If you’ve got savings, use them, even if you still need to use a credit card or apply for a loan to cover the rest.
Could You Free Up Money By Making Cutbacks?
Ask yourself if you could save the money to pay for your expense with other cutbacks around the home and in your expenditure. You may still need to use a credit card to cover the upfront cost, but cutbacks could help you to repay the debt quickly, minimizing added interest.
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