Unexpected expenses come in different forms – the emergency vet bill when your beloved dog swallows a screw, an impromptu get-together with the old high school gang out of town, a subscription charge after forgetting to unsubscribe from the free trial service you were trying out.
In many cases, a line of credit is ready to step up and absorb the financial blow of these unexpected expenses. But what if you’re maxed out? Or what if you don’t want to resort to credit, being the financially responsible person that you are?
Here are seven tips on how to handle the situation:
1. Have an Emergency Fund –
Also called a rainy-day fund, this money can help you pay for an unexpected expense without any strings attached. An emergency fund’s main purpose is to deal with unexpected expenses, regardless of nature or severity. The general rule of thumb when determining exactly how much you should put into an emergency fund is roughly three month’s equivalent of your incurred monthly expenses. This should be enough to cover most financial emergencies. Treating and labeling it as an emergency fund reduces the risk of the money getting raided for impulse purchases, which is a common issue for savings accounts.
2. Ask Family Members –
In dire times of need, family can help. According to research conducted by Money Advice Trust, up to two-thirds of people aged 18 to 24 have leaned on their family or close friends for financial support. Borrowing from family is usually a more affordable solution than a loan since you aren’t required to pay interest, and they are often more flexible when it comes to a repayment schedule.
3. Consider Credit Counseling –
A credit counseling agency can help point you to solutions that avoid any form of borrowed money while also offering specific advice to guide you towards a more stable financial situation. Credit counseling is a free resource that’s offered by non-profit organizations that specialize in financial education. The service assesses your budget, credit rating, and consumer debt and then creates a comprehensive plan that aims to boost your finances. A counselor can also recommend tools and resources to help you gain control over your cash.
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4. Pawn Your Valuables –
If you find yourself strapped for cash, look into your personal collection, and consider pawning your valuables for money. Aside from fine jewelry with expensive metal, diamonds, and precious gems, there is a broad range of valuables in your house that many pawnshops will accept. You can pawn your expensive tech items like premium watches, designer handbags like Louis Vuitton and Hermes, personal computers, gaming consoles, go-pros, DLSR cameras, firearms, and even power tools. Just make sure you go to a reputable pawn shop so you can get a good price for your items. You also want a pawn shop that can give you flexible terms, so in case you have money in the future, you may want to redeem your pawned items if they’re still available.
5. Get a Side Hustle –
When you need money fast, and you have no savings to dip into, then it is time to get a side hustle. Doing an extra job means you earn more income, which you can use for whatever purpose. You can leverage your hobbies like baking, making jewelry, tutoring kids, and providing lawn care. Another option is to optimize technology and work remotely for companies on your downtime from work. This works well if you have qualified skills like content-marketing, video-graphics design, data-analytics, bookkeeping, accounting, virtual assistant, and more. There are many side gigs out there for every talent. All you have to do is look and apply so that you can earn more dough when you’re in a financial crunch.
6. Make a Garage Sale –
There is truth to the saying that one man’s junk is another man’s treasure. Apart from valuables, there are many other items in your house that you can sell for a profit. Make a garage sale to earn money quickly. Of course, everything must be in good, usable condition. Sell your clothes, children’s clothes, appliances that are no longer in use, books, children’s toys, cutlery, and more. To hold a productive and successful garage sale, make sure that you advertise well. Leverage social media to keep your friends and family informed.
7. Become a Ride-Sharing Driver –
If you have a car, apply to become a ride-sharing driver with Uber, Grab, or Lyft. You don’t have to invest a lot of money to start earning from picking up passengers all over town. You just need to have a valid license and create a profile with any of the apps mentioned above. These ride-sharing companies offer an excellent compensation package, making it a good choice to earn more money for sudden expenses. You can easily do this during your off-peak hours at your job, so you can optimize your time and make full productive use of your vehicle.
When life throws a financial curveball at you, don’t just run to the bank to apply for a loan. Make sure your personal finances are intact after you get through the unexpected situation by following the seven aforementioned tips in this blog post. If you need any help, give us a call at 1-866-699-2227 and speak with a certified credit counselor about your situation. We’re here to help!