Financial emergencies come abouts every so often and you just have to deal with them. The question is how do you do so? Here are some tips.
1. Making a Budget
If you have no idea of how much you are spending and how much is coming in every month, it is going to be hard for you to know how much you can set aside for your emergency fund. If you don’t have a budget, you don’t know how much you are spending and whether you are overspending or living below your means. A budget is not going to force you to change your financial habits but is a tool that is going to help in deciding where your money goes and knowing where you are with your finances.
2. Preparing to Minimize Your Monthly Expenses
You don’t have to do it all at once, but you can start to cut out those things that aren’t a necessity. When you succeed in lowering your recurring monthly expenses, you will have an easier time paying your bills even when the money is tight.
Have a look at your budget and see where you are spending more than necessary. Do you have a checking account that you pay a monthly fee on? Consider looking for a bank offering free checking accounts. There is no need to pay $40 for a landline you rarely use. Consider canceling it or switching to a lower-rate emergency-only plan. If you take the time, you are going to find different areas you can cut costs and save money on.
Maybe you are one of those people who leave their air conditioner or heater running when not home, or leaving lights on even if when not using the room. These are some steps you can take to lower your utility bills. This is also a good time to start shopping around for lower insurance rates. Find out whether you can cancel some types of insurance, like car insurance in the event of an emergency. Some companies offer an extension, find that out before you start the process.
3. Closely Managing Your Bills
You don’t have to waste a lot of money on finance charges or late fees, but this is what many people do. This is one of those areas you need to be studios in, especially in a job loss crisis. You can save a lot of money by being organized with your monthly bills. If you make a late credit card payment per month, it can end up costing you more than £300 in a year. This can even lead to your card being canceled, and it can even happen when you need it the most.
Have a date twice a month where you through your accounts and make sure you haven’t missed any due dates. Another idea is scheduling your electronic payments or mail checks days before the due date. If there is a delay, your payment is still going to arrive on time. If you are finding it hard to track all your accounts, then compile a list. When you complete the list, you can use it in making sure that you are on top of your accounts. You can also use it to see if there any accounts you can close or combine.
You also need to keep in mind your non-cash assets, such as credit card rewards points, frequent flier miles, and gift cards.
4. Taking Stock of Non-Cash Assets and Maximizing Their Value
When preparing, it may include all your options. Do you have extra foods in your home that you can prepare and lower your grocery bills? Do you have frequent flyer miles that can be used when traveling? Do you have rewards from a credit card that you can convert to gift cards? Any gift cards you can sell to cash or put towards entertainment? These assets can go a long way in helping you lower your monthly expenses. You can achieve that by knowing what you have and how to use it. Knowing what you have can help you avoid spending a lot of money on things you don’t need.
5. Paying Down Your Credit Card Debt
When you have credit card debt, the interest you are paying for it every month is going to take a huge chunk from your monthly budget. If you put in the effort to reduce your credit card debt, you are going to reduce your monthly financial obligations. This will leave you with some cash to use in building your nest egg. When you get rid of these interest payments, you are left with money to us for other important things. Some choose a consolidation loan with one manageable payment, visit Loanza to find out more.
6. Getting a Better Credit Card Deal
If you have a balance on your card, it might a good idea to transfer it to another card offering a lower rate. When you have low interest on your card, you can pay off the debt faster or pay lower monthly payments. Before you do this, make sure the amount you are saving is greater than the balance transfer fees. If you want to transfer your balance to a new card offering a low APR (Annual Percentage Rate), try your best to pay off the debt during the introductory period before the rate goes up.
You should also try to find out whether your current credit company will lower your interest rate. There are companies that do this because they don’t want to lose you as a customer; it is cheaper for a company to retain an existing customer than to get one.