3 Ways You Can Prepare for an Emergency

According to the most recent data, 80 percent of Americans live paycheck to paycheck. If you spend all of your earnings to pay for your immediate necessities, your finances are in a precarious position. All it takes for them to crumble is one unexpected bill or emergency repair.

Unfortunately, the chances you’ll face these unexpected expenses are high. No matter how hard you stick to your budget, things like medical issues, speeding tickets, and household repairs happen. If you aren’t sure how you would handle any of these things, check in with this list below.

  1. Trim the fat to create savings

Ideally, you would have a safety net to cover these emergencies. A robust savings account is an essential feature of your finances.

There’s no doubt that contributing to a savings account can be a challenge, especially when you have very little cash to spare. But it’s not impossible!

You can find savings even when you’re living paycheck to paycheck, but you’ll have to leave the most common financial advice behind. Tips like eliminating daily takeout and coffee doesn’t really work — probably because you don’t buy these things every day — but there are other facets of the average budget anyone can exploit, like:

  • Insurance: Take the time to research home or renters, car, and medical insurance to see if you’re getting the best possible deal. For example, if you make the right choice with car insurance, you could be saving as much as 50 percent every year.

 

  • Cell phone: In 2019, nearly everyone has a smartphone. While it’s an important device few can live without, it may be a costly addition to your budget. You may be able to save as much as $200 by switching from a national carrier to a pre-paid carrier.

 

  • Groceries: Everyone needs to eat to survive, but you may be spending more than you need to fill your cupboards. The folks at MoneyKey share their favorite tips for cutting costs without sacrificing quality or quantity on their blog. Eliminating how much food you waste by incorporating leftovers could save you as much as $1,800 a year.

Go through your budget to figure out which one of these tips promises to save you the most. If you’re feeling adventurous, try combing through every expense to see if there’s something you can tweak.

  1. Try alternatives to mainstream borrowing

Without a savings account, plenty of people turn to their banks asking for a cash advance to help. While this is certainly one way to handle an emergency, it’s not necessarily the most convenient way to get a personal loan, especially if you have bad credit.

If you’re typically denied a cash loan from a bank, or given less than you need, you could try an online lender like MoneyKey. They offer installment loans online in a much more convenient format than most mainstream lending options.

Typically, online lenders put less of a priority on credit scores, so bad credit doesn’t necessarily disqualify someone. You’ll also find it easier and faster to secure an online installment loan, so you don’t waste anytime wondering what to do when you are strapped for cash in an emergency.

  1. Make more money

It may sound glib, but increasing your income is one of the best ways to protect yourself from an emergency. This is especially helpful if you’re struggling to find ways to trim the fat or secure a personal loan.

Depending on your situation, you may be able to do this in one of three ways:

  1. Ask for a raise: You may be able to boost your budget simply by asking your boss for a raise. Research shows these techniques increase your chances of successfully getting the raise you want, so review them before you make a meeting with your manager.

 

  1. Apply for a new position: If your boss won’t give you a raise, it’s time to think about moving ship. Check to see if there are any employment opportunities in your area that offer a higher rate of pay. Use a job board like Indeed or Monster to find out what skills you might need to be considered for these higher paying jobs.

 

  1. Get a second job: If you have your nights and weekends free, you may be able to pick up a second job in service or retail to supplement your income. If your routine is too hectic to work according to a store’s hours, check in with the freelance economy. There are websites that host freelancers and connect them with designing, accounting, and writing jobs. As your own boss, you’ll get to choose when you work on these tasks.

Unexpected bills and repairs are a part of life. Although there may not be a way to eliminate these from happening to you, you can improve your chances of facing these emergencies with confidence. Between better savings, alternative borrowing, or a new job, there’s a way for anyone to take on the unexpected.

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