You can plan ahead as much as you want, but you can never foresee unexpected financial emergencies. However, you can identify which are the main types of emergencies and how you can manage them.
You can try to protect your finances as much as you can, but you can't plan ahead for the unexpected. There are plenty of types of emergencies that can shake up your life...and your finances.
However, you can prepare yourself a bit better if you can identify the most common emergencies you can face. Here you will find four types of financial emergencies and tips to handle them!
Losing your job
This has been one of the most common emergencies Americans faced in 2020 due to the Coronavirus pandemic. Either if you've been fired or laid off, losing your job is one of the most difficult situations you can face.
So, if this happens to you, and while you process this issue, make sure you check if you are eligible for unemployment benefits and start the process to file weekly claims.
Also, you should contact your service providers (including credit card companies and loan lenders) so that you can check the payment assistance options. Make sure you do this before missing payments, otherwise, it will affect your credit score.
To conclude, create a budget and eliminate those items that aren't essential, like memberships or subscriptions. Don't worry! You can add them once your finances are back on track.
Facing a medical emergency can be quite stressful! It may also mean you won't be able to work until you recover, so the first thing you'll need to do is to reach out to your employer to learn how much leave you to have and if it's paid or unpaid.
You may also want to reach out to your insurance company to check if it offers any copayments or deductibles you will be responsible for. The most important thing, in this case, is to avoid unexpected medical bills!
This is one of the most common emergencies that can affect your finances. Almost everybody had to deal (at least) once in their life with a flat tire or a dead battery.
Before you start frustrating, contact an emergency roadside assistance provider so that you can get your tire changed on the spot or get your car towed. Once you've done this, you should reach out to your insurance provider.
As you may already know, car repairs are quite pricey. So, when you get the repair budget make sure you ask as many questions as you can in order to find out what exactly has to get fixed and which are the options.
Once you agree on the final price, ask if there are any payment arrangements available.
Also one of the most common emergencies that impact your finances is unexpected home repairs. In these cases, the faster you act, the better. Otherwise, you'll end up paying for higher than expected repairs.
The first thing you have to do is to check if you will need a professional to help you or if you can fix it yourself. Try to be honest and don't try to repair something you can't fix. You'll waste time and money!
If you think your savings won't cover the costs, you should consider taking out a low-interest personal loan.