Friday, January 27, 2012

Strategies To Cover Unexpected Expenses

A horrifying cloud of black smoke rising from your engine. A broken bone when you haven't paid a single cent of your $1000 deductible. These are just a few unexpected events that mean huge expenses will soon be coming your way. How do you handle such catastrophes? Here are a few strategies:

Image from Wikipedia

Plan Ahead

This is one measure best performed in hindsight: set aside a portion of each paycheck in case something happens that requires huge payments. There are plenty of websites, books, experts and smartphone applications dedicated to getting your finances squared away. Tips include stockpiling reserves of emergency cash. Start now because you never know what could happen.

Take Out a Loan

Banks and lending companies have plenty of programs in place to help out in emergency situations. Some, like Great Plains Lending online installment loans, can help out in emergencies and can be paid back in installments instead of one brutal lump sum. This is usually the fastest and easiest option to get extra cash for a time-sensitive emergency.

Call in Favors

Remember that time you lent your best friend a few hundred dollars when times were tough, and you let your sister borrow a few more hundred when that job fell through? It's perfectly okay to ask for a return favor. Talk to friends and family, and explain the situation to see who can help out. 

Extra Jobs

Try to see if you can pick up some additional freelance work or midnight shifts. When it comes to financial emergencies, don't be too proud to turn down extra work at a place you might consider "beneath you." Money is money and work is work. 

Talk to Your Boss

If you're paid by the hour, talk to your boss and coworkers about picking up some extra shifts. If you're on good terms with your boss and feel comfortable asking for an advance on your next paycheck, do so. If you're not comfortable, or if you've asked for several advances recently, it might be best not to risk it. 

Hit the Market

Whether you go to a pawnshop or Craigslist, there's a good chance someone's willing to pay good money for something you're not using anymore. Ask around, and see if there's anything you have that someone else needs. 

Financial emergencies are by definition extremely stressful. It might seem scary at first, but you have plenty of options at the ready to solve your crisis.

What are your strategies to prepare for unexpected expenses? Share your thoughts in the comments section.


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