Unexpected expenses hit us hard and fast, and seemingly at the worst point in our lives. And that’s what makes them so frustrating! You’re not ready for them, you don’t know how to cope with them, and who knows how long the effect of paying for them will last.
But that’s why you’ve always got to have an idea about being prepared for them. That’s just what we’re here to help you with! Unexpected expenses don’t have to ruin you; check out the tips listed below.
Always Have an Emergency Fund in Place
Emergency funds are amazing for ensuring you’ve always got some cash where you need it. A literal safety net, an emergency fund is a pot filled to the brim with money you only use when you’ve got no other option. Don’t underestimate your need for one here. If you’re able to keep this pot level with a few pennies once a week, you’ll be in pole position for dealing with an unexpected expense. Even just a dollar or two over the weekend will make all the difference if something happens!
Have a Plan for What to Do Next
Anything can happen in life, and you can’t plan for it all. However, whenever you make a big purchase like a house or a car, you should think about how it could go wrong financially. If your car breaks down or you get into an accident, you need to think about the day it’ll become a write-off. It’s always a possibility whenever you use it, so have a plan in place; start with determining the damage, see if you can sell, and then visit a site like edmunds to find a new car for the best price.
Immediately Slash Your Budget
If you didn’t have an emergency fund in place, the best thing you can do when dealing with an unexpected expense is to slash your budget. Cut it back by half if you can, or three quarters if your home is well stocked at the moment. Do this for at least a week while you tackle the bill on your plate. You can restore the budget to its usual size once the ordeal is over, and it’s always best to take from the renewable income side than any life savings (not emergency savings) you have that will be hard to top up again.
Try to Sell a Few Things
Finally, go around your home and see what could be sold. A few bits of jewelry you don’t wear anymore? Put them on Ebay. Some old tech stashed in a drawer? Either sell them for parts or to a company who can refurbish them. Whatever you’ve got that could bring in at least $10 a piece, that isn’t too sentimental to part with, put it online or track down a buyer who won’t mind paying top dollar.
An unexpected expense shouldn’t ruin you. Use tips like these to be prepared if the time does come.