Useful Tips for Dealing with a Financial Emergency
Financial emergencies are rarely expected, and when they do happen you can very easily be blindsided by them, but it is really important that you do not panic. Yes, you might have huge medical bills to pay or your home might need an expensive new roof, but if you succumb to the stress, you will find it much harder to get it sorted.
With that in mind, here are some of the best tips for dealing with an unexpected financial emergency. By knowing in advance what you should do when a financial emergency happens, it will be much easier for you to keep a cool head and deal with the issue as effectively as possible.
Sit down and take stock
When a financial emergency happens, the best thing you can do initially is to sit down and work out what caused it to happen and what it means for your finances and your family. By having a clear idea about what the issue is and what it means for you, you can address the root cause of the problem and hopefully find a solution now, as well as putting protective measures in place to prevent it from happening again – an emergency fund for example.
Look for possible sources of extra money
Ideally, you should try to see if you can find the extras money you need to deal with the financial emergency somehow, For example, you could look at the types of annuities you hold and whether or not you can sell them for immediate cash, you could look at remortgaging your home or even seeing if friends and family members may be able to help you out. It can be uncomfortable to ask, but it may help you get over the emergency and give you the breathing space you need to get back on track.
Work out your priority bills
Next work out which bills you really need to pay and which can wait a while, Priority expenses are things like mortgages and utility bills that would leave you in dire straits if they were to be missed. Unsecured debts and optional expenses are less serious because they will not lose you a roof over your head, which means you can put them on the backburner for now.
If you’re going to be unable to pay your credit card bills, medical expenses, or whatever because you are in a financial emergency, then it is important you call the lenders and let them know what is going on as soon as possible.
Most lenders are actually pretty reasonable and they may agree to giving you some breathing space on payments, freezing interest, or waiving any late payment fees until your financial emergency is sorted. So, don’t bury your head in the sand.
If you casn’t get your hands on the cash right now, try to pick up an extra income so you can at least start paying down your debts sooner.
Financial emergencies are tough but stay calm and do the above and you will get through it!