Money worries are one of life’s biggest hurdles. We can carefully plan our finances to the very last penny, but now and again life has the tendency to throw a curveball in the mix when we least expect it: your car breaks down, your pet gets ill, or your child comes home with a letter for a very expensive school trip!
So, what do you do when you’re faced with a bill that you weren’t expecting? How can you find the money and reduce the strain you’re under? Here are five options.
- Assess your budget
Are there any areas of your spending that you can cut back on in order to cover the payment? If you’re able to put money aside by reducing something – such as how much you spend on lunch during the week or many times a week you go out for dinner – then this could be your simplest and easiest of options.
If you currently don’t have a budget in place, now could be the time to put one together to help you find room for a rainy day pot in case this ever happens again in the future.
- Try to use savings first
An emergency fund is an ideal solution if you are faced with an unexpected bill. A good rule of thumb is to have a few months of expenses set aside in a bank account to help pay for them should an unexpected cost arise. The more you save, the better off you’ll be, but even just a month or two can help you get back on track quickly. If you’re faced with an unexpected bill, try to use savings first before borrowing.
- Borrow some money
Depending on your circumstances, a quick lending option such as an emergency loan could work for you. Before you hit apply now though, it’s important you feel confident you can pay it back, otherwise, you will be left in a much more difficult situation. Keep in mind that you’re going to have to make ongoing repayments when borrowing money and the interest rate on emergency loans is usually higher. Therefore, this will have to be factored into your budget for the next few months.
- Ask for an extension on the payment
Some merchants and service providers will allow you to set up a payment plan, so you can break up the bill into manageable chunks. This allows you to spread the payments out over the next couple of months. Give the biller a call and see if this is an option for you.
- Stay calm
Most importantly of all, stay calm. Don’t feel you have to deal with an unexpected cost on your own. Share your worries with friends, family and your partner who may be able to help.
It can be easy to get upset or stressed when the unexpected happens. But to get back on track, it’s important to carefully assess the situation, do the best you can and have a plan in place to avoid things like an unexpected payment having a negative effect again.