As stable as your life may seem, Murphy’s law—the idea that anything that can go wrong, will—is still in full effect. Unfortunately, there is a large percentage of the population that admits they would not be in strong financial shape in the event that they needed quick cash. An emergency can range from something like a totaled car, a visit to the hospital, or even a job layoff. So, how can you be ready for these types of situations? The following list includes a number of ways you can handle a financial emergency without having to stress too much about it.
Emergency Fund
One of the best ways to prevent yourself from getting caught short on cash in the event of an emergency is to create an emergency fund. A good amount of money to save is at least $1,000 for a family of two, with a higher fund being required for a larger family. This emergency fund can be used to repair plumbing, fix car issues, and cover any unexpected medical fees. It should be noted that once you spend any money from your emergency fund, your number one priority should be to replenish it before spending money on any type of luxury, such as going out to dinner or watching a movie. It’s good to put this kind of fund in a bank savings account rather than in a stash at home so you can accrue interest and have more in your account over time, along with other benefits.
Emergency Loan
If you don’t have enough money saved up just jet, your next option is to take out an emergency loan. Although these types of loans often come with high-interest rates, they are among the fastest ways to obtain money. There are many emergency situations that might warrant applying for a cash advance loan. These may include having your vehicle repaired or to get an urgent medical procedure.
Prioritize Expenses
When you are strapped for money, it can seem like all your bills are coming to you at once. It may be a difficult thing to do, but you need to prioritize your expenses in order to reduce the amount of stress on you. Things you need to pay for are food, shelter, and medicine. Get your needs met first, and then go down the list. Cable, internet and other luxury items should not be on your list until the necessities are paid for.
An emergency can happen at any time. Often, it can ruin a person’s financial situation within a matter of days. This is why it is so important to be prepared and level-headed in the event that it happens to you.
Read more financial tips here: The Money Is in the Clutter
