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Keeping it Together: 3 Ways to Prevent Emergencies from Affecting Your Finances

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Almost everyone experiences unexpected events from time to time. Some of these events are simply inconvenient or emotionally challenging, but many unexpected situations result in expensive bills that you may not be prepared to pay. Even when you do your best to budget properly, unexpected bills were not in your plans. Finding a way to get through a financial challenge is important, and there are a few options available to consider.

Some people who are dealing with high expenses and no funds available to pay them may be thinking about simply prioritizing the bills. You may have plans to pay what you can and to simply delay payment on other bills until cash is available. However, when you do this, you may be charged expensive late payment fees. This can make your financial situation even more strenuous to deal with. Your credit scores could plummet because of late payments and collections accounts. You may even face a disconnection of services, a repossession or other serious consequences. Clearly, it is in your best interest to pay your bills on time, and these ideas can help you to find the money that you need.

Fund a Rainy Day Savings Account

The best way to pay for unexpected expenses is to pull money from your savings account. Before an emergency situation develops, make regular deposits into a savings account. The balance will grow over time, and you may have a sizable amount of money to draw from when a situation develops. However, if you do not have a savings account to draw money from and something has already happened, you may need to consider other financial solutions.

Use Credit Cards

A savings account is a great idea because it eliminates the need to take on debt to get through this rough patch in your life. When savings funds are not available, you may think about charging expenses to your credit card. You may be able to pay your bills directly with a credit card, or you may be able to take a cash withdrawal from your credit card. However, remember that the interest charges can be high with some credit cards. It may take months or longer to repay this money. In some cases, you may not have a credit card, or you may not have any available credit left on your credit cards.

Find a Short-Term Loan

The previous two solutions for dealing with a financial challenge are only suitable in some situations, but they do not apply to many people. If you do not have a savings account or if you do not have a credit card with a decent available credit balance, applying for a short-term loan is a smart idea. A short-term loan may be processed within a day or two in many cases. Typically, you can keep the money for a few weeks, and this makes it easy for many people to repay the loan balance. A short-term loan essentially can be used as an advance on your next paycheck. Requirements are usually minimal, so this solution may be more applicable to many people than the other options mentioned here. You can contact services like PrettyPenny.co.nz today for more information.

It is not reasonable to expect to go through life without experiencing a few bumps in the road. Because of this, it makes sense to have at least one or two backup plans available. If you currently need extra cash to deal with a present situation, spend time analyzing these top financial solutions. By doing so, you may find an excellent way to pay your bills as soon as possible.