How to Get Extra Money For an Unexpected Family Event?
Everyone should have some emergency savings. Even if you don’t expect to ever need it, an emergency can strike at any time.
Despite your best efforts, life isn’t always predictable, so having extra money on hand for emergencies is never a bad idea. Read on to know some ways you can get extra money for emergencies.
Use Loans If You Absolutely Have To
It can be very tempting to use short-term loans as a way of smoothing over any financial problems or gaps—especially when they seem so easy to apply for online. As much as possible, set the idea of using a loan aside unless you absolutely have to.
Remember that it’s always possible to avoid borrowing money altogether, simply by asking friends and family members for their support instead. However, this other option may not always go your way or be available to you. Loan officers at nimble.com.au advise that quick cash loans can get you out of a sticky financial situation and be repaid properly if you select the right provider.
Make sure that the interest rates are manageable, and the loan terms are reasonable. All loans come with interest, but if you are prepared to pay for it, repaying your loan can be manageable.
Lastly, in connection with getting a loan, make sure you don’t make it worse by overdoing it. Do not compound your debt problem by using credit cards or other loans to pay back the debts you owe from another source—not only are you paying more fees and interest charges, but the original debt is getting bigger too.
The best option if you can’t avoid indebtedness, therefore, is to use it as little as possible!
Keep Separate Bank Accounts
There’s nothing wrong with using one or more savings accounts for your regular savings goals, but it might be a good idea to separate these funds from any cash that you’re saving up purely for emergencies. That way, if something does happen, ideally there won’t be any temptation to dip into the emergency fund to pay for anything else.
Learn to Set Limits
Preparing extra money for emergencies also means learning to live without a portion of your money. Having an extra $1000 available in case of emergencies is absolutely brilliant, but don’t forget that when you have it, you really do have it.
This means living without it—so try putting aside your emergency fund to reduce your reliance on credit cards and other short-term loans. It’s a big help if you ever need to do this, as well as being a great way of keeping an emergency savings account from just being ‘extra’ money.
What happens if you have enough money to cover a certain event but not quite enough to cover all the associated fees? If there’s just a small discrepancy, it might be a good idea to carry on saving for your event and see what happens—but if the gap is much bigger, just remember that there’s no shame in borrowing the remainder from somewhere else if necessary!
Make Your Money Work
A little ‘free’ money is great, but it’s always nice to know that your savings are working harder for you.
If you use a high-interest savings account for most of your cash, try setting aside some in a low-interest bank account, this will help protect the bulk of your funds if interest rates start to fall.
You can then transfer any excess into higher interest accounts over time as they become available, keeping the overall balance of your emergency fund balanced while maximizing its earning potential! You can then go back to identifying high-Interest savings accounts.
One very easy way to save is by using online banking sites that provide good rates of return on short-term savings accounts.
Check your regular statements for details of accounts that are currently offering particularly high-interest rates (anything above 5% is quite competitive these days) use these for all your regular contributions to your savings account, and you’ll accumulate a sizable amount in no time at all.
Don’t Spend Your Savings
This advice may seem easy, but it gets complicated when you try doing it consistently. Few of us like losing money on anything! But if there really is no option but to draw down on savings in a time of need, don’t panic.
Most prudent savers keep around three months’ worth of their monthly outgoings in reserve, so if you can get through that, you’re doing well. Even if you have to sell everything you own to continue making ends meet until the emergency is over, then at least your credit rating will be kept intact and no further damage will have been done.
As a final thought, remember that borrowing money isn’t always a bad thing, and many people who have a good relationship with their family members and friends borrow from them when they need to.
However, if you do find yourself in a pinch every once in a while, follow the tips given above to ensure that your financial situation doesn’t get any worse than it already is!