What to do in a financial emergency

Urgent medical attention, a job loss, or an emergency home repair can be incredibly stressful. Even a well-planned budget can fail us sometimes. Here is what to do in a financial emergency.

Don’t panic

In the event of a financial emergency, it is easy to get caught up in the emotion of the moment and panic. Decisions made out of a moment of panicking can have long-term effects on your finances, and may take a long time to overcome. Calm down, think rationally, and evaluate the impact of what you do on your future. If you are not too sure, consider seeking counsel from someone wiser.

Use your emergency fund

Nothing can give you more peace in the face of a financial emergency than knowing that you had already set up an emergency fund. Notably, some hospitals, repair shops, and contractors offer better prices when you pay via cash. This is because they may not have to pay a credit card fee on the transaction.

Borrow from family and friends

Many people advise against borrowing money from family and friends. However, you can go ahead if you are confident about your ability to repay them without setting them back financially. Besides, people you know can give you more favourable terms compared to mainstream banks, and you can get the money fast. Before going down this route, think long and hard about whether the decision will be right for your relationship.

Use short-term credit

Using a credit card is another option to take care of an emergency. If you can pay the money back quickly, it can be a useful tool. Use of credit cards can be troublesome if you allow the interest and fees to add up fast.

Apply for a personal loan

You can access a personal loan based on your credit profile. With a simple online application, the lender can assess your creditworthiness to determine the amount and interest rate to be charged. You can receive the money upfront once you agree to the terms of the loan.

Call Empowered Finance today for advice on what to do in a financial emergency.