Although many of us are able to easily cope with the financial problems, most people are unable to handle the financial situation and end up making wrong choices. This lands them in debt and creates a plethora of extra problems; most that could have been easily avoided. Here are the top 10 ways to handle unexpected expenses and financial emergencies
1 – Got Cover?
A lot of us forget that we have some form of cover or the other. If your computer’s hard drive breaks down, don’t just rush off to quickly buy another hard drive. Chances are that you probably have a valid warranty with the hard drive. If you do, send it into warranty and let the company handle it.
2 – Find out your Rights
When you rent a home, you are entitled to various rights. These rights are in place to protect you and your finances. If a water line broke, it is not your job to pay for it. If a gas line starts leaking, that is not your problem.
Do not jump the gun and immediately assume that you are responsible for such problems. Contact your landlord and tell him that there is a problem that needs to be fixed. However, you may want to check your agreement and rights before you make that call.
3 – Get out the Emergency Fund
To be honest, there will be many times when we are unable to pay off something. This could include a utility bill, the repair bill, our credit cards (especially when your average credit card debt is increasing), illness or even sudden unemployment.
If you run into an unexpected expense, dig into your piggy bank and take some money. Just remember to put the money back once you have the extra cash.
4 – Readjust your Budget
In many cases, we may not have an emergency fund we can tap into. Considering the average credit card debt, most of us probably don’t want to use our credit card as an emergency fund. One way is to ride the emergency wave and cut back on some expenses. Most of these budget cuts are usually for a month or two, or until you recover. By making a few adjustments, you can quickly recover from a financial emergency.
5 – Delay the Luxuries
If you were planning a cruise for Hawaii sometime in the summer, you may need to postpone it if your emergency is that huge. If you need to have expensive surgery done that your health insurance doesn’t cover, you may need to delay the cruise. Remember, that doesn’t mean you cancel it, just postpone it for a while longer. You could also change your holiday plan to better fit your new budget.
6 – Know when you’re done
If you have a few investments that are not turning a profit, you may need to call it quits and recover some of the money. It’s that simple!
7 – Sell the Old Stuff
Most of us have a lot of old stuff lying around that we don’t use. If that person is you, try selling some of that old stuff on an auction site or hold a garage sale. You may not make a fortune but considering the financial emergency, something is better than nothing.
8 – Prioritize your Debt
If you have an auto, home and credit card loan, you need to prioritize your debt. Always try to pay off the smaller debt first. Pay off the minimum amount on the other loans and pay off more on your small loan.
9 – Keep things Maintained
If you have a car, keeping it maintained will substantially reduce the chances of a large problem surfacing. Every month or so, take your car to the mechanic and have him inspect it. Fix what you need to.
10 – Got Backup?
If your computer crashed, do not just go off and buy another computer, especially if you have another one lying around. If you casually use your computer, wait a while and save for the repairs. In the meanwhile, use the other computer.
There are many ways you can handle financial expenses and financial emergencies. Just remember to remain calm and maintain composure.
About the Author: The above article is written and edited by shannen, who is a freelance writer for various blogs and communities related to money and finance. In her free time she writes articles related to economy, finance, average credit card debt and anything that is related to them.