An unforeseen financial emergency will catch you when you least expect it. It might be a sudden medical emergency, job loss or car breakdown. Despite the reason for the financial emergency, the procedures for dealing with an unexpected cash crunch are about the same.
When you are in an urgent financial situation, and you are not certain how to best handle it, this article will give you some practical tips. Financial emergencies are not at all pleasant and, by any other definition, are hard to cover. However, being ready and following the right steps will help you trim them down and you won’t have to give up your house.
Economic emergencies come in many forms. They are commitments that you didn’t plan for and won’t be easy to pay. Whether you need to have anticipated this expense is immaterial once you come face to face with it. When you have to, pay it soon, and when not paying for it can bring serious consequences to you.
In such a case you are looking at a financial emergency. This means many people are vulnerable to sudden financial emergencies such as a major car breakdown, a family member suffering ill health (meaning the breadwinner will have to take time off from work), or also a burst pipe that causes flooding in the home.
Here is a simple guide to help you deal with the unforeseen financial emergency:
Find Out The Source Of The Problem
Having to face a financial emergency can be stressful. Furthermore, the stress can lessen your ability to assess the situation rationally. Therefore the first step you need to do is to relax and try to determine the main cause of your problem. Once you’ve identified the cause, it will be a lot easier for that you find a lasting solution to this problem.
When something has unexpectedly happened and puts a serious strain on your funds, then you need to first carefully assess the new circumstances. This means not getting hysterical or panicking in response which may only make your situation worse. This will also serve to create additional unease for you as well as your loved ones.
You should have a cool head before you start going about to rectify what may have gone wrong. You also need to understand just how you got to be in your current position. It is simple to identify the issue if it’s something as clear as a refrigerator breaking down. However, it can be rather unclear when the emergency shows up as you suddenly depleted all your money before you get your paycheck.
Get a loan
When you consider the issue to be temporary, you may think about getting a short-term moneylender personal loan. In Singapore, you are able to easily access a loan from the licensed money lender. The type of loan Singapore you need to take depends on the situation, the amount of money you require and your ability to repay.
For example, for the salaried professional, a payday loan can be suitable in this case. The good thing about payday loans is that they are easy to repay and are easily accessible. However, when you prefer an unsecured loan that comes with repayment tenure of about a year, you may consider taking a moneylender personal loan. Because of the fixed payments for each month, personal loans can easily be repaid since it is possible to have a working budget.
Prioritize Your Expenses
Once you find yourself in a money crunch, make each penny count. The concept here is to try to save the money you have, in so far as you can. To achieve this, you need to prioritize all your expenses. Be sure you are aware of the difference between ‘wants’ and ‘needs’. Do away with any unnecessary and not-so-important expenses. Remember that you need to spend when it’s absolutely necessary. For example, paying for utility bills is absolutely a must; however, you could delay your yearly trip for a while. These easy steps will help you handle smartly any financial emergency you may face.
It does not matter if the emergency you are going through is directly financial, such as abruptly finding out that you are in debt, or simply indirectly connected to money. Such as your car needing some expensive repairs or the washing machine may not working, however, in both scenarios, you will need to find the cash if you would like to rectify the situations.
The first practical thing to do is to first draw up your household budget for upcoming month as well as prioritize the outgoings. You will have to make sure that all your fixed costs – rent, mortgage payments, loan payments, electricity bill, etc – are prioritized above everything else. The very last thing you want in the middle of the financial emergency is turning the situation into a crisis whereby you all of a sudden are in danger of failing to pay your debt or even lose your home.
After you have identified your main priorities, next you will need to look at additional areas where you can cut back on. Depending on the size of your financial problem, you may perhaps have to make considerable savings and as this is not going to be enjoyable, the good thing is that there is no bad time to consider your household expenditure. Seek to significantly reduce on non-essentials or when possible cut them out entirely. Let’s say you have Netflix subscriptions and gym membership, you could ask yourself whether you, in reality, require these yet your vehicle is off the road meaning you won’t be able to reach work on time.
Financial emergencies come in many forms and are not at all pleasant for anyone. Make sure you identify the cause of your problem. But ensure you have a cool head before you start going about to rectify what may have gone wrong. If you consider the issue to be temporary, you may think of getting a short-term moneylender loan. A practical thing to get you started is to first draw up your household budget for the upcoming month. Then cut back on all the unnecessary things but prioritizes your fixed costs.