Financial emergencies hit everyone. The key is to have a plan in place when they do arise or to know what options are available to you. Some employers have benevolence funds to pay for emergencies for their staff. Others offer 401K plans with flexible options that allow you to take out a loan on the balance.
Additionally, there are lending options out there that can give people quick cash when a financial emergency comes up that they can’t pay for themselves.
Here Are The Top Ways To Help You Get Out Of A Financial Emergency
Ask For Help
Everyone gets in a tough spot at some point in their lives. The important thing is to ask for help. There is a reason that GoFundMe does so well, and that’s because the truth is that people do want to help their friends, family, and community when they are in need. Financial emergencies come in many forms.
Unexpected medical bills, car repairs, loss of property due to a fire, and many more. The key is being willing to reach out to your community to let them know what happened and to give them an opportunity to say yes. Not everyone will give, but someone will, and that someone can be enough to help you out of a tough spot financially.
Leverage Your Emergency Fund
If you have funds set aside for a rainy day when you come into a financial emergency, it’s raining and time to use those funds for what you intended them for. Leveraging your emergency fund to cover all or a portion of your expenses in an urgent situation can give you the relief you need. While it might feel tough liquidating those savings, that’s what they were put there for in the first place. Use as much as you need to help you.
Take A Loan On Your Investment Funds
Many employers offer 401K funds as a benefit to their staff. One of the best things you can do is to take a loan on these funds if it’s an option. It’s typically a very low-interest rate and can help you get out of a tough financial situation. While you want to pay back the funds you borrowed as quickly as possible, taking a loan on your investment funds can give you everything you need to cover your financial emergency now.
Get A Small Personal Loan
Another option when you run into an emergency is to take out a small personal loan. Some companies even offer emergency loans for bad credit for people who need it the most. The key here is to understand the repayment terms if any collateral is required, and when payments are due.
These loans can help with expensive car repairs, paying off medical bills, and even covering airline tickets when you need to get somewhere to be with family. Having the resources to cover emergencies and help you get home if there is a death in the family can be a lifesaver when you need it the most. Even retirees can take advantage of these loan options when necessary.
How To Plan Ahead
There are many ways to plan for emergencies. Since the very notion of an emergency implies that you didn’t know it was coming, how can you prepare? Think of it as insurance. You don’t plan on a car accident, or something happening to your house, but you have insurance for it anyways. Planning is about creating a buffer to help you when a future emergency arises.
Think of the different kinds of things that might require a sudden cash infusion. You might need to fly last minute to be with family. Perhaps your car engine died, and you don’t have enough in your car maintenance fund to cover it. There are plenty of scenarios.
While a savings account can be quick and simple, others leverage investment accounts instead. These accounts tend to make people more money and cashing out a portion while incurring fees, can still be more cost-effective than just saving. It’s also important to look into resources in your community, ask family and friends, and be aware of all the ways you can get help when you need it the most.