Found yourself in a sudden financial fix? It happens to almost everyone. These are hard money times for a whole lot of people in a whole lot of places. Of course, this forlorn financial fact doesn’t make it any easier when a money disaster happens to you.
How to Handle Unexpected Financial Disasters
A financial disaster tends to occur at the worst possible time. Read what we’re about to tell you, and you will be better equipped to handle life’s unexpected money disasters.
Expecting the unexpected
One’s financial condition can change overnight. No, it’s not fun to think about, but it is imperative that one is prepared.
If you lost your job, had an unforeseen medical emergency, or lost a lengthy lawsuit, would you be able to cope? What would you do if your family car blew a head gasket and required pricey repairs?
If lightning hit your house, would you be able to pay for emergency roof repairs? Anticipating a surprise cash crisis can help you deal with it if and when it happens. And it probably will.
Of course, it’s not always a single event that sends a person’s finances swirling down the drain. Sometimes, a number of nagging worries build to the breaking point, facilitating a veritable tidal wave of fear, stress, and anxiety. You’d probably fare a whole lot better if you had a backup plan in place. Expect the unexpected, and know what to do when a surprising money mess befalls your budget.
Managing an out of the blue move
Not all money misfortunes are the result of something awful. A person working their way up the corporate ladder may be asked to relocate to a new city to accept a higher position. While this could be fabulous news to the person being promoted, it can also be a big unexpected expense. Being transferred to accept a better job can be costly. In fact, count on it being a budget breaker unless you have an emergency savings plan in place.
The cost of moving companies and temporary accommodations in a new location can be massive. In many cases, the employer requesting the relocation will pick up some or all of the moving expenses, but it’s still wise to have a buffer of backup money, explains US News.
Steps back to financial solvency
The first step toward financial recovery is identifying the source of the problem. Do you overspend on unnecessary items? Do you remit only the minimum monthly payments on high-interest credit cards? Money woes often follow a period of financial mismanagement.
Then again, a person can be a responsible spender and still be struck with a devastating financial disaster. Know what you’re dealing with, and you will be better able to devise a long-term solution. Identify the problem or problems, let go of stress, and focus on positive ways to remedy the situation, advises Lifehack.
Next, build a budget and make a pledge to stick with it. Take an honest look at your monthly expenses and make note of bills you could do without. Discontinuing a super expensive cable TV plan and canceling extravagant subscriptions can spare hundreds of dollars that may then be set aside for a real emergency. Minimizing your monthly bills now helps you prepare for any money mess that might manifest in the future.
Innovative ways to stash cash
Stop wasting money. If you let your air conditioner run all day while you’re away, cease that habit forthwith. Stop paying checking account fees and find a bank that offers a free account. Investopedia says don’t pay for a landline phone if you never use the thing. Little money wasters add up. Identify them, and quit squandering cash. Save it in an interest bearing savings account, instead.
Pay down your credit card debt without delay. If you use a number of cards and make only minimum payments, you could be racking up some fairly insane interest charges. It may make sense to look into no credit check loans that could let you pay all your cards at once.
Experts advise keeping an emergency fund that could cover at least three to six months of living expenses if worse came to worst. If the notion of stashing that much cash boggles your budget, start small. Set aside a few bucks a day, and before you know it you’ll have a nice nest egg you can count on if a sudden cash catastrophe were to occur.
Luke Coleman is a personal finance consultant who loves to help others by writing articles on the web. His posts are available on a variety of lifestyle and personal finance websites.