Financial emergencies are a part of life. Whether it’s an unexpected medical bill or the car breaking down, financial problems can pop up when you least expect them.
If you’re not prepared for these situations, they can be devastating. You may have to take out loans or even declare bankruptcy if you’re not careful. But there are ways to avoid these outcomes with proper planning and preparation.
In this guide, we’ll cover how to deal with financial emergencies in your life so that they don’t become a major problem.
Take up a side gig
If you’re looking for a way to make some extra cash, consider taking on a side gig which is the fastest way of making money. A side gig is an extra job that you do to make extra money while keeping your main job. Side gigs can be done in your spare time and may not require a full-time commitment, which means they will fit into the life of someone who already has another job or other obligations.
Side gigs come in all shapes and sizes: from babysitting to writing articles for websites, there are plenty of ways to get started earning extra cash with little risk involved. There’s no need for anyone with basic computer skills or experience working with people to be discouraged from doing so either—most platforms offer tutorials on how everything works so newcomers feel comfortable getting started immediately.
Some popular examples include Upwork (formerly known as Elance), Fiverr, TaskRabbit and Uber; each platform offers different services at varying rates depending on what they want to be done as well as whether they will pay out hourly wages or commission based on successful completion of tasks completed successfully by freelancers like yourself.
Sell Unwanted Items
There are many ways to sell items. For example, you can sell them on eBay or Craigslist, look for items to sell at a garage sale, and look for items to sell on Amazon and Facebook Marketplace (they’re both owned by Facebook). The following websites also allow you to list your items: OfferUp, LetGo and Poshmark.
Get Short-Term Loans
A short-term loan is a good way to deal with an emergency. These loans are typically for 3-6 months and the interest rates vary depending on where you get the loan from. You can choose between getting a bank, financial institution or payday loan company. If you don’t have enough money to pay back your loan, try asking a friend or family member who might be able to lend you money until you get your next paycheck.
Side Step Your Expenses
While it’s tempting to look for ways to make more money when you find yourself in a financial emergency situation, sometimes the better solution is to simply reduce your expenses. You may be able to save a lot of money by cutting back on spending and finding cheaper ways of doing things. Below are some steps you can follow:
- Look for ways to save money on basic expenses like food, utilities and transportation costs.
- Cut down on discretionary (non-essential) expenses such as cable subscriptions, eating out or buying new clothes when they aren’t necessary.
- Reduce debt payments by paying off credit cards or getting out of other high-interest loans as quickly as possible. This will save you thousands in interest costs over time.
When life hits you with an unexpected expense or financial crisis, there are ways to deal with it
Being proactive is always a great way to do it. Having an emergency fund that can cover at least six months of expenses will make all the difference when it comes to dealing with a financial emergency. Having a plan in place for your finances is also very helpful and knowing what type of debt you have (and how much) can help prevent future problems from occurring. If you don’t know where to start or feel overwhelmed by the amount of debt you’re in, contact a credit counsellor who can help guide you through this process step-by-step.
You can never prepare for every financial emergency that comes your way, but you should be prepared for the ones that do by having a few tricks up your sleeve. We hope this article helped you understand what to do when life hits you with an unexpected expense or financial crisis, as well as some tips to avoid it happening again in the future.
Article by Emily Lamp
Emily Lamp is a freelance writer, working closely with many aspiring thinkers and entrepreneurs from various companies. She is also interested in self-improvement, entrepreneurship and technology. Say hi to Emily on Twitter @EmilyLamp2.