Your Blueprint for Managing Sudden Expenses in 2024 and Beyond
An unexpected expense can land in your lap when you’re least prepared to deal with it — like at the start of a brand-new year when you’re still sporting debt from the holidays.
Ill-timed emergencies are a reality of life. Your brakes can need replacing years before you expect, or you can need an expensive prescription to deal with a tenacious cough.
Normally, your credit cards can help you handle these surprise expenses, but they’re already full from your holiday shopping. With this usual safety net unavailable, you might be wondering how you can handle an unexpected expense.
What options do you have in an emergency? You might have more than you realize. Below, check out this game plan for the unexpected.
Check Your Budget for Hidden Cash
Give your budget a second pass to ensure you aren’t overlooking any hidden cash. You might be surprised to find out things aren’t as tight as they seem.
Look at your upcoming expenses and determine whether they’re something you can cancel or avoid. Subscriptions and memberships are a good place to start — just make sure you won’t face any penalties for cancelling mid-month. You can limit your future spending by saving “no” to offers to go out for dinner or drinks.
Sell Your Belongings
You might find cash in the stuff you have lying around the house. Go through your belongings to see if you have anything of value. You don’t want to sell anything that you rely on often. Otherwise, you’ll have to buy this item back. And with inflation the way it is, you’ll probably pay more for it, too.
Take out a Line of Credit
Sometimes, a tight budget is so tight you can’t find any extra cash, and you have nothing worth selling. Don’t worry — a line of credit is considered a safety net in situations like these.
Like credit cards, they come with a limit that you can draw against in as many or as few purchases as you want. You will only pay interest on the amount you take out, not the full limit. This might suit your finances better than a typical personal emergency loan, which factors interest on your entire loan right away.
You can go online to find out how easy it is to apply for a line of credit. Many online lenders also set up digital platforms for you to review and manage your account, making it easy to pay off whenever you need.
Ask for Help
Your financial emergency can feel deeply personal, but don’t let this stop you from reaching out to loved ones. If they’re in a good financial situation, they might be willing to float you the money until you get back on your feet. They may also be willing to be your cosigner if you apply for an emergency loan.
Don’t panic if all your friends and family are struggling. You might consider asking your employer for a cash advance if you know you can repay this amount soon.
Contact Your Creditors
It can be embarrassing to admit you’re in a financial emergency, but don’t let these awkward feelings keep you quiet. Talking to your creditors might reveal they have programs in place for customers who are struggling with their finances.
Call their billing department to explain the situation. Then, ask if they can help you in any way, offering ideas like a financing plan or deferment.
The new year may be the worst time to deal with an unexpected expense, but you have options. Go through this blueprint to help you handle it with confidence.