How to Deal with Unexpected Bills

The unexpected can be frustrating.

 

We’ve all been there, life’s moving along just fine and then- out of nowhere- the washing machine breaks, the car needs major repair work, and you’re left trying to find the money to cover the cost.

 

Meanwhile, there’s the added stress of the fast-growing mountain of laundry to deal with, or the lack of a car when you’ve got places to go and people to see.

 

There’s nothing more frustrating than an unexpected bill suddenly arriving out of nowhere, and if you don’t have the cash readily available to cover it, life can get pretty stressful very quickly. So, what should you do when hit with unexpected costs?

 

Rainy Day Fund

 

Hindsight is, of course, a beautiful thing, but funding a savings account is a good place to start.

 

Having emergency savings is always a good idea, and while it may seem tempting to spend money, rather than have it sat there doing nothing, you will be grateful when a situation arises, and you need it.

 

So, how much should you have saved up in case of emergency? Having enough money to cover three months of your expenses is a useful target. You can use the fund to cover the cost of unexpected bills. If you’re ill and are unable to work, your bills, rent or mortgage payments, and food costs will be covered.

 

Taking charge of your money now will make life so much more comfortable in the future, particularly in those unexpected, expensive situations, like needing essential repair work.

If you’ve had a financial setback, this article can help.

 

Feeling in control of your finances means that you always know how much money is coming in, how much is going out and how much you have left over to spend as you wish.

 

Action Steps To Consider

• Create a budget, even if that budget is simply on notebook paper.
• Separate your expenses between fixed and variable, and take a hard look at your variable spending.
• Take steps to cut your variable expenses each month and put the amount you save into a separate savings account.
• Consider using a budgeting app to monitor your spending, and
• Set up a separate bank account to discipline yourself to save.
• Save 5% of your monthly gross income

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Keep it in the Family

 

 

Approaching a family member may be an option for you, but things can become complicated.

 

Not having savings in place may mean that you need to turn to family members for a loan. Of course, while you may not need to pay your family interest on the money borrowed, there are disadvantages to borrowing cash from a family member.

 

Money and emotion together can be a divisive combination, so issues of resentment and jealousy could enter the mix from siblings when borrowing from the bank of mom and dad for example. It may be worth figuring out a repayment schedule and sticking to it to prevent problems in the future.

Many freelancers and business owners may have times when cash flow is a problem. Use this site to apply for a loan Find My Rate at Social Finance in order to cash flow your business until you can collect receivables from customers.

 

Arrange a Loan

 

If you need to get cash fast and you aren’t able to use savings to cover that annoying bill that’s come out of nowhere, taking out a loan may be the option that you need. Nowadays, many lenders make it easy for you to apply quickly for a loan online.

 

Loans come in many shapes and forms, so it is essential to read the fine print before committing yourself, even if you are desperate to get hold of the cash quickly. When applying for a loan, take a look at the repayment rates and ensure that they are affordable for you before signing on the dotted line.

 

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/