Credit: wayhomestudio via FreePik
An emergency fund is a safety net during tough financial times. But what happens when that safety net is in tatters?
Three years into the pandemic, it’s a reality for many folks. Roughly 56% of Americans don’t have $1,000 set aside for emergencies, according to a phone survey conducted in January. The poll, which surveyed more than 1,000 adults, reveals more than half of the US wouldn’t be able to pay for an emergency expense out of pocket.
Despite being in good company, it can be distressing when you’re in this position yourself. What happens if your car breaks down and you need to repair it to get to work on time tomorrow?
There are other ways to handle this unexpected expense. From direct lender loans to negotiating bills and more, this guide gives you some ideas. Here they are, in no particular order.
Borrow Short Term Personal Loans
When you need money fast to pay a mechanic or plumber, sometimes short term personal loans are the best option. They’re simple and convenient to find online, as most financial institutions offer digital loans.
Online direct lenders, in particular, make it easy to see if you qualify for their short term personal loans. You can fill out an application using basic information in a matter of minutes. If approved, you may get the funds you need by the next business day.
Before accepting one loan online over another, always compare multiple online direct lenders. You may find a better rate or term by shopping around for short term personal loans.
Try DIY Solutions
Depending on your emergency, there’s a chance you won’t need to involve a professional who will cost you a lot of money. You may be able to handle minor repairs on your own or with the help of a knowledgeable friend.
While YouTube is a fantastic resource for DIY repairs, consider looking up your next project at the library. Published books have to go through a rigorous editing process to ensure they share reliable advice, whereas anyone can post to YouTube.
Ask Your Creditor for an Extension or Financing Plan
If your emergency fund isn’t up for your next emergency expense, talk to the company that you owe. Whether it’s a healthcare practitioner, mechanic, or plumber, many businesses offer flexible payment plans.
Like short term personal loans, these programs break up what you owe over multiple payments, so you pay off your expense in smaller portions. And like many short term personal loans, these payment plans may come with interest and fees added to your original bill.
Delay Repairs if Possible
Whenever something goes wrong, it can feel like a true emergencyin the heat of the moment. But not all emergencies are made the same. Some are urgent things that require immediate attention, regardless of your financial situation. And others are less time-sensitive.
Suppose your car won’t turn over one day. If you need this vehicle to get to work every day, it’s imperative you get this fixed at any cost. However, if you’re only a weekend driver who can get to work using reliable public transit, there’s less pressure to repair your vehicle as soon as possible.
In the latter scenario, you have time to rework your budget to slash spending and save more money until you have what you need for repairs.
Once you take care of your unexpected emergency, you should focus on rebuilding your emergency fund. These savings can help you avoid taking out short term personal loans or delaying repairs in the future.