No matter how careful you are in life, there will always be accidents occurring, machines that break down, and unexpected financial crises that crop up all the time. And for the vast majority of us in the UK, it can be a testing time regarding money. Be honest - if you rely on your car to get to work every day and you write it off, could you pay for a new one tomorrow? Or if you use a computer for a work-from-home job and the hard drive blows, could you buy a new one so you can continue earning vital money for your family?
The truth for most of us is that these events often lead to a lot of struggle with regards to our finances. And in today’s guide, we’re going to discuss a few ideas you can use to get yourself out of trouble. Having been through this experience a few years ago when our boiler broke down, we’ve certainly learned a few lessons - so here’s our little guide to dealing with household money emergencies.
No one likes the fact they have to pay out for insurance. It just seems like an unnecessary expense that we often object to in more ways than one. But when the day comes that you need to make a claim, you will be thankful for your foresight. Anything in your household, from your car to your expensive stereo system needs to be insured with the best possible coverage, so shop around and find a policy that suits your needs. Otherwise, it will be down to you to meet all the repair and replacement costs - which you may not be able to afford.
Borrowing the money
In an ideal world, we wouldn’t have to borrow money at all, and we would all have a lovely balance in our savings accounts and a sizeable emergency fund that we can dip into whenever we need it. But the reality is that in a household money emergency, many of us need to borrow. There are a few options available, of course. According to New Horizons, short term loans are OK as long as you pay them straight back, so you don’t expose yourself to huge interest payments. You might be able to apply to your bank to extend your overdraft, too - or use your credit card to pay for the emergency, again, ensuring you pay it back as soon as possible. But one of the best methods of making ends meet is to borrow off friends or family. If they have money sitting in a savings account, offer them a higher level of interest, and it will still be cheaper than the interest you will pay on loans.
Sell your clutter
Our homes are packed full of items and products that we no longer use. So in the event of a financial emergency, have a look around in your spare rooms, lofts, and cellars to see if there’s anything you could sell on. You can make a sale relatively easy on eBay (depending on the quality of the product, of course), and you could also turn up at a car boot sale one Sunday morning to set up a stall.
So there you have it - a few ways to get out of a financial fix. Why not share your thoughts in the comments section below?