Whether you live alone, with your partner, or as a family, keeping your house maintained and your brood happy can be challenging. It can be all too easy to lose track of what’s coming in and what’s going out, so getting your finances in order is important. From time to time, you may find unexpected expenses going out of your bank account, leaving you financially strained. If you’re worried about what to do, here are 5 ways to handle unexpected expenses.
Use Your Emergency Fund
Having an emergency fund in place can not only give you peace of mind, but it means that you have some cash ready should you experience any unexpected expenses. Whether it’s to fund a boiler repair, or to fix a leaking a roof, dipping into the pot you’ve set aside can be a huge relief. A general rule of thumb is to try to ensure you have roughly three months expenditure set aside in your emergency fund, which should be more than enough to cover the cost of most common home emergencies.
Dip into Your Savings
If you own a cash savings account which you’re allowed to access without any consequences, it can pay to cash these, rather than having to borrow money to foot any unexpected bills. However, you need to make sure that the money in your account isn’t earmarked for another purpose. The last thing you want is to be penalised for making a withdrawal, and it’s much better to dip into your cash savings, than to take money out of your investments.
Take Interest-Free Credit
Depending on what your unexpected bill is, you may be able to pay using interest-free credit. For instance, if your car is past the point of being fixed and you need a replacement right away, you may find that a dealer gives you 0% finance. If you need to replace your carpet or sofa, you can also benefit from interest-free credit. When using interest-free credit, make sure to only borrow what you can afford.
Borrow from Family
Research carried out from the Money Advice Trust indicated that 67% of 18-24 year olds have used their family to borrow money from. While you may feel hesitant or embarrassed to ask your nearest and dearest for help, it’s much better to borrow cash from people you know and love, rather than having to pay interest and potentially find yourself in dire straits.
Use a Personal Loan
Another way you can prepare for any unexpected expense is by taking out a personal loan. Personal loans enable you to borrow small amounts which are set at a fixed rate of interest. Make sure you find a reputable lender like Simple Personal Loans where you can find a loan UK option that is right for you.
Using your emergency fund, dipping into your savings, taking out interest-free credit, or applying for a personal loan are just a few things you can do to deal with unexpected expenses. If you have a family to provide for, it’s important that you have some backup cash to keep you going, so don’t hesitate to try out any of the options listed.
