How to Pay for an Unexpected Expense
Whether the car needs extensive repairs, the boiler has gone bust, or your phone has broken breaking, these problems usually occur just after you’ve made the last payment. You’ve probably been there before, and it can be a huge cause for stress. Sometimes life can just be frustrating when things seem to break all at once. No matter how restrained you are in your spending habits, how well you budget, surprise expenses such as these can put a strain on your finances. Considering this, what can you do to deal with these situations? Here are some ideas of how you can pay for an unexpected expense. (Image Credit: Karolina Grabowska/Pexels)
Start an Emergency Fund
One way that will help you to feel completely in control and able to deal with life’s little surprises is to start an emergency fund. When you get your monthly pay packet, put aside a certain amount to help pay for household repairs and maintenance. If there are others in your household, who are also earning a wage, you could ask them to contribute to the emergency fund. The emergency fund can then be used for expenses such as bringing in a plumber to fix your boiler, or for any unexpected mechanical check-ups on the car. However, make sure that you are not dipping into your emergency fund for other expenses — after all, you never know when your boiler will break down!
Take out a Short Term Loan
You might not be able to afford to put away a lot of savings, or the expense could be larger than your emergency fund balance. If this is the case, a good option would be to take out a short term loan using a website such as loanpig.co.uk. A short term loan will provide you with the cash needed to cope with an unexpected expense and are often quickly delivered to your account after your application has been approved. They have a short repayment schedule of between three months and one year, making them a perfect option for a one-off loan. However, make sure that you don’t fall behind on repayments as doing this could affect your credit score.
Borrow from Family and Friends
Another lending option is to borrow the money you need to cover the expense from family and friends. This would be a good option if your personal financial situation requires a less rigid repayment schedule than that set out by loan companies, and you are lucky enough to have family and friends who are willing to lend you money. However, it’s advisable to draw up a written agreement of how much money will be loaned to you, as well as the approximate date you should repay it by. Having a written agreement will help to keep repayments on track and helps to protect both parties should there, unfortunately, be a disagreement further down the line.
Above all, if you have borrowed money from family and friends, never take advantage of their generosity and try to bend your repayment terms too much, or even fail to repay the money. To do would will only result in spoiling your relationship with them.