Category: Emergencies

The best ways to cover the cost of an Emergency

From time to time we will all have emergencies where we suddenly need money to pay for something. It could be a leaky roof, broken down vehicle or an unexpected bill. Wherever it comes from and however much it is, it can come as a shock and you may find yourself searching for ways to find the extra money that you need to cover those costs.

There are a number of different options that we should all consider to see which one might be the best for us. The first is to use savings that we might have. It can be difficult using savings for this sort of thing. It is likely that you will have spent a lot of time saving up the money and taken a lot of effort. You might feel that you do not want to be spending this money on something mundane. It may even be that you are saving up for something specific and so do not want to wait even longer to have that because you have had to use some of the money. However, if you decide to borrow the money instead of saving, it could take you longer to pay more into the savings account as you will have to be making loan repayments as well as paying interest, which will be costly.

If you have a credit card or an overdraft then you may be tempted to use these. They are quick to use as you will have already organised them with your bank and so if you need the money really quickly, they can be very convenient. It is worth noting though, that if you need cash and draw it against a credit card, it can be extremely expensive. Also that because there is no regular repayment plan with these sorts of loans, it can mean that they will hang around for a long time as you may not be motivated to pay them off. This means that they could be really expensive as you could end up paying a lot of interest on them. Therefore you need to decide whether you really want to borrow money in this way and if you do, whether you will be able to pay it off early. There are other ways to borrow which could be better, such as a personal loan, which could be cheaper and may not necessarily take too long to organise.

If you do not have a good credit record then you may be tempted to take out a payday loan as this will allow you to still be able to borrow. These can be useful and many people use them successfully but you do need to be very careful with them. You will have to pay back everything that you have borrowed, plus the interest and fees in one lump sum payment when you next get paid. Therefore you need to make sure that you will have enough money to pay it all back or else there will be additional fees to pay.

It could be worth trying to earn some extra money to cover the cost. Perhaps ask for an advance on your salary or see whether you can put in some extra hours to get some money that way. It can be worth thinking about whether you have anything that you can sell in order to raise some extra cash as well. This can be a way to raise money really quickly if you sell on social media or other online sites, particularly if you keep your prices low. You might have clothes, accessories, homewares or other items that you no longer want or need and you can sell to raise some. It could be that you will have enough to get you out of trouble.

Another option could be to borrow some money from friends and family. This may not be an option, it obviously depends on how much money they have and whether they can afford to lend any of it to you. You will also need to think about whether you are happy asking them for money and whether you think that it might have a detrimental effect on your relationship with them if you do ask for money. Think about whether they might expect you to pay it back quickly or whether they might want some interest on the money or not.