A financial emergency can strike when you least expect it, so it’s important to stay prepared for inconvenient circumstances. Whether you need to pay for an unexpected medical bill, vehicle repair, or home renovation, you need to have access to immediate cash.
Even if you have a solid financial plan, you may encounter obstacles if you’re unprepared to handle financial emergencies. The requirement to collect money urgently can disrupt your monthly cash flow, negatively influence your credit score, and cause money anxiety. So, it’s essential to be familiar with the different ways you can handle financial emergencies if they occur.
Open an Emergency Savings Account
Even if you have a savings account, opening an additional account to save money that you don’t touch unless required for emergency purposes can be helpful. Having a separate emergency savings account creates a psychological barrier preventing you from spending the money on non-emergency situations.
Do your due diligence to research and compare fees between different banks. Choose a reputable bank with a low fee and start putting money into the account as soon as possible. You can even set up automatic deposits so that a portion of your income automatically gets deposited into the emergency savings account. This separate account will enable you to access quick cash dedicated for emergencies when you need to pay unexpected bills.
Take Out a Cash Advance Loan
Cash advance loans allow you to borrow a fixed amount to cover emergency expenses easily. One of the most incredible benefits of a cash advance loan is that the funds are unrestricted, allowing you to use the money to solve any emergency without the need to fill out lengthy applications.
When you choose a reputable payday platform, you can rest assured that you’re borrowing money from an experienced lender. Complete an online application to quickly find out if you meet the borrower criteria and get access to cash in a short time without leaving your home.
Find Out if Insurance Companies Can Help
You pay for insurance to ensure that you’re covered during emergencies. If you encounter a problem with your home, car, or health, your insurance company might be able to help. Take some time to check the fine print on your policies. Contact the company to determine if they can cover some or all of the expenses associated with the emergency. Here are a few ways your insurance coverage might come in handy:
- Homeowner’s insurance: If a natural disaster damages your home, your homeowner’s insurance may cover necessary repairs.
- Car insurance: If your car was damaged in an accident, your insurance company might help cover the cost of repairs and provide a temporary rental car.
- Health insurance: If you need emergency treatment, your health insurance might cover some of the costs, lowering your out-of-pocket payments.
Reach Out to Your Lenders Immediately
If you’re struggling to pay your bills or loans during a financial emergency, you can explore your options if you reach out early to your lenders or creditors. The Consumer Financial Protection Bureau suggests contacting your lenders, loan servicers, and other creditors to let them know about your situation if you can’t make a payment or bill on time and want to discuss payment options. They may offer you several options to handle the situation without significantly affecting your credit score.
Dealing with unexpected life events that lead to financial emergencies can be challenging. This guide can help you deal with the hectic process without disrupting your monthly cash flow.