How to Pay for an Emergency Expense
Life can throw us unexpected curveballs from time to time. Sometimes those curveballs can hit us hard financially and make it difficult to see a way out. Luckily, there are three major methods you can use to pay for an emergency expense. Today, we’re going to look more specifically at the pros and cons of each of these methods so that you’re more knowledgeable on the subject.
Make Money
Emergency expenses like an unexpected car repair can clear out your wallet. When you find yourself needing more money than you have, you always have the option of making more money. Picking up extra shifts or working overtime at your current place of employment is a step in the right direction. If you don’t have an overtime option at your current job, then you may want to consider a side hustle of some kind. There are countless options which all pretty much revolve around your personal skills. Can you mow a lawn? Then, start offering to do it for your neighbors for a fee. Can you drive? Why not try your chance at Lyft or Uber to get some extra cash?
While making extra money can help to alleviate the burden of financial stress when you get hit with a curveball, there are some downsides to this method. The first downside is that you’ll be working more hours. Whether it’s overtime at your job or your new side hustle, it’s going to require more time than you’re currently working. This could mean less time with your family, not having time or energy to workout and the possibility of having an unhealthy diet of convenient fast food.
Borrow Money
When you borrow money, you can alleviate the stress of the financial burden quickly. In addition, you can slowly work to pay off the balance you owe over time. A fast cash loan you can get online can help you in a financial pickle. These loans are typically available to those who are currently employed.
Borrowing money does come along with some downsides. The first being that you’re going to be paying back the initial loan amount plus interest that accrues over time. The second is that you’ll be locked in a contract where you’ll have to make monthly payments on the loan until it’s paid off.
Save Money
Saving money is something that we all know we should do, but do you really have an emergency fund set aside? The truth is that you should start building one today if you don’t already have one. Your emergency fund can be a great way to take care of a financial burden without having to overstress about it. When you save money you’re essentially using the money you already have to pay for the unexpected happening. This means no working extra hours and no paying back interest on loan funds you borrowed.
The downside to saving money in an emergency fund is that you’re essentially tying up that money. That’s money that could be used to invest in assets which could make you more money than just sitting in a bank account. Savings also requires that you put so much of your income into a savings account each month, which means less money going into your pocket each month.
Paying for emergency expenses is not something that you may want to particularly think about. However, it’s something that you should really plan for. When an unexpected expense comes up, it’s better to have a gameplan to act on so that you can move forward quickly.
*This is a collaborative post.
