Being hit with a sudden expense can be one of the most frustrating things to deal with, especially if you are just starting out. When you need to deal with such an expense, it is always a good idea to have a plan to help mitigate stress.
Create Emergency Funds
One of the best ways to not only deal with the rise of a sudden issue but also the possibility long-term ones is to create an emergency fund. These rainy day funds can help you set aside some money that you were not going to use anyway to help you deal with a potential issue. Having such liquid resources available can be one of the best ways for you to rest easy in the event of all types of crises. By planning ahead and perhaps giving up that pizza or gaming subscription you will reduce your long term stress. Remember, just because you have a bit of extra cash today doesn’t mean you can afford to splurge. Some expenses come at irregular intervals like new tires or car repairs but they must still be paid. You can either save up for them in advance and earn interest on the money while you are waiting or you can put them on your credit card when they happen and pay much more (including interest) later. If it takes you a year to pay off a credit card bill at 20% that means you paid 1/5th more than you had to. So that $500 tire expense cost you $600 because you didn’t plan ahead.
Look into Other Budgets
What other spending do you do on a regular basis? Do you have a shopping fund? An eating out fund? Regardless of what your funds look like, it can be a good idea to dip into other budgets to help you mitigate unexpected issues. Everything from video game expenses to monthly subscriptions can be adjusted to make room for future expenses. Take the time to balance your budget and see where you can afford to spend a little less. One way to do this is through finding a good app that will help you track your expenses, and create a budget. My daughter likes an app called “Every Dollar” from Dave Ramsey which is among the “envelope budgeting” methods i.e. it helps you segregate your funds so you have enough set aside for essential expenses.
3 of the Best Envelope-Budgeting Apps You Should Use to Better Manage Your Cashflow
Adjust Overall Spending
Individuals who already have a budget that they can rely on can look forward to a little bit more adjustment to make room for potential issues. There are numerous ways to get creative here. Avoid eating out and instead try to make your own lunches. Walk or take the metro instead of driving where it can be avoided. Think about your specific situation and what you can do to set aside more money.
Health Emergencies
If you were injured in a car or work-related accident you might have huge expenses that even the best-funded emergency fund wouldn’t cover. Of course, this is the purpose of having health insurance and accident insurance but it is still possible to end up in a financial crunch because you can’t work due to your new disability. If you are dealing with medical or property expenses after an accident, it is possible to arrange for a lawsuit settlement loan to help you reduce your stress and improve your overall situation. These loans can help you cover your living expenses while you wait for the conclusion of a lawsuit, and they are designed to provide you with fast financial relief, usually within a 24 hour period to make sure that you are not behind on your day-to-day payments.
Like with most emergency situations, the best way to deal with large sudden expenses is to plan for your future as carefully as possible. Try to avoid adding on other costs to your expenses, and do not be afraid to get creative through freelancing when it comes to managing debt.
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