Six Ways to Deal With Any Unexpected Expenses
No matter how carefully you budget and plan, unexpected expenses are an inevitable part of life. Car repairs, medical bills, or home maintenance issues can wreak havoc on your finances if you’re not prepared. When unexpected expenses arise, it’s important to act quickly and make smart choices about how to cover the costs.
Ask about payment plans
Before you put all the expenses on your credit card, ask if the service provider offers a payment plan. Many hospitals, repair shops, contractors and other businesses will allow you to pay off a large bill within a few months with little or no interest. By taking advantage of these plans, you can save yourself from high interest rates on credit cards.
Request an extension
If you simply cannot pay the bill right away, politely ask for more time before it is due. Most reputable suppliers will be understanding if you explain your situation and are willing to pay the bill as a sign of good faith.
You can use free scripts , online dispute letter templates and cost of living calculators to bolster your case. Look for forms related to cable bills, hospital bills, credit card statements, phone bills, etc. to save time and effort.
Check if you qualify for financial aid
Depending on your income level, many hospitals and clinics have financial assistance programs that can help offset some or all of large medical expenses. Other assistance programs from government agencies and nonprofit organizations can help with utility bills, housing costs, or other bills in an emergency.
Consider a credit card, but read the fine print
If you absolutely must pay your expenses with a loan, know what you’re signing up for . Cash advances often come with higher fees, while recurring purchases may qualify for a low introductory interest rate. Using a card from your bank or credit union may get you better terms than a retail card. Just make a plan to pay it off as quickly as possible.
Cut other expenses
To free up money for an unexpected bill, look for areas where you can temporarily cut costs. Cut unconscious spending , cancel subscriptions and memberships , and avoid any frivolous purchases until emergency expenses have been paid. Use a reliable budgeting app or spreadsheet to help you stay on top of your spending.
Use your emergency fund
An emergency fund is an ideal way to cover unexpected expenses without going into debt or making difficult trade-offs with expenses elsewhere. If you don’t already have one, now is the time to start building up cash reserves for the next inevitable rainy day.
Staying calm and having a plan for managing irregular large expenses can make dealing with these stressful situations much easier. A little creativity and prioritization goes a long way when you need to find money quickly.