How You Can Be Prepared For Your Next Financial Emergency
What does your financial emergency look like? For some people, it’s an unavoidable trip to the walk-in clinic and the following prescription meds they must buy; for others, it’s a series of bills sharing the same due date; or it could be the sudden realization that you have not one but five birthdays to attend in the next week and payday is too far away.
What constitutes as an emergency is different for everyone. How people across America handle covering their own financial crises will differ, too — with varying degrees of success. The Federal Reserve conducted a survey back in 2014 that revealed over half of those polled wouldn’t be able to cover an emergency of $400 or more on their own. Many of those surveyed say they’d sell furniture in order to cover it.
There’s a better way than clearing out your home of appliances and couches. Take a look at this list to make sure you’re prepared for your next financial emergency, even if your wallet isn’t.
- Get a Line of Credit: A personal line of credit is an essential financial tool for those who can’t contribute to a savings account regularly. It acts like a loan you can withdraw cash from as often as you need it, using parts of or the entire principal you receive. Direct lenders like MoneyKey offer similar flexibility with their terms, so you’re less likely to find its repayment too difficult to meet — even with a tight budget. You can choose how you repay a line of credit personal loan from MoneyKey, electing to pay a minimum balance or the entire sum when you have the extra cash.
- Create a Budget: Next to a personal line of credit, your very own savings is an indispensable addition to your own finances, and you’ll never have this back-up cash without a budget. By tallying your income and expenses, you’ll become better aware of how you’re using your money. Try to eliminate any unhealthy spending habits brought to light under this attention and reroute this money to a savings account.
- Cut the Fat on Regular Expenses:While that weekly movie ticket or daily coffee is easy to cut out of your budget, your regular expenses tied to life’s necessities aren’t the same. You can’t stop paying rent if you expect to continue to live in your apartment. Start to brainstorms ways you can save money paying for your monthly expenses. Download a grocery coupon app to help shave off a few dollars on produce. Compare prices on car insurance and make the switch. See if moving to an apartment with lower rent is within your capabilities.
- Supplement Your Income: Though undesirable, a second job can help you prepare for emergencies. If you don’t want to apply for an entry-level retail or customer service position, you may find something more palatable online. If you’re crafty, you can sell your homemade wares on Etsy. If you have your own car, you can sign up as an Uber driver.