29/01/2020

Dealing with financial emergencies: your financial first aid kit

29/01/2020

Dealing with financial emergencies: your financial first aid kit

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A financial emergency can happen at any point.

From job loss to the breakdown of a relationship, vital home repairs or bereavement, the reasons people find themselves in unexpected turmoil vary hugely.

They say expect the unexpected and you’ll always be prepared, however, that’s often easier said than done, with financial emergencies leaving most people blindsided and not sure what to do next.

Regardless of the situation, everyday life still goes on. Your bills need to be paid, you still need to keep the house running and you still need to put food on the table – so what do you do?

You can’t predict these emergencies but it’s important to always be as prepared as possible should one arise.

Having an emergency or ‘rainy day’ fund in your budget is something that’s advised by many financial platforms – it gives you the chance to be able to deal with anything life throws at you and offers a little breathing space during the toughest times of your life.

Having a financial safety net might seem impossible but by taking a few simple steps you’ll be able to prepare for the future.

Here we guide you through the ways you can navigate your way through any financial emergencies that could pop up.

Remain calm

When faced with the unexpected it’s only natural to be upset or panic, however, this can only make the situation harder to get under control.

No matter what the situation is, it’s important to take a deep breath and try to remain calm. This will allow you to put yourself in the right mindset to evaluate things and find the best solution to the problem.

Take time to think about the circumstances surrounding the issue before making any decisions. This will ensure you focus on all aspects of the problem and allow you to ensure that you deal with all financial implications at once.

Is the expense your responsibility?

It may come as a surprise, but people often end up paying for an emergency expense automatically when they might not have to.

For those that rent their home, it could instead be down to your landlord to fix the problem. This will be dependent on your agreement and will generally only cover you for breakages on certain items.

In other cases, you could be covered by a warranty or insurance policy. Again, this will be dependent on the issue at hand, but it’s always worth checking before you go using your own money to handle the situation.

Get your financial priorities straight

If you find yourself faced with a financial emergency that leaves you struggling to pay some bills, then the best thing to do is to prioritise your expenses. Some are more important than others, which means they need to be paid before others.

The big ones to cover are those that cover your food and shelter. If you find yourself struggling to keep on top of payments for things such as TV subscriptions or broadband, don’t be afraid to reach out to the supplier to discuss your circumstances ad arrange a repayment plan.

Once you’ve set out your list of bills in order of priority, then you can look through your budget and find ways to cut back in other areas. No one likes to give up little luxuries in life, however, by cutting back you’ll be able to put yourself back in a stronger financial situation sooner.

This doesn’t have to mean you make major cutbacks – unless necessary, even small savings anywhere can make a massive difference. It all adds up and will help you not only deal with your current emergency but future ones as well.

The emergency fund

We mentioned above that it’s often advised to have an emergency or ‘rainy day’ fund to help you be prepared for any future emergencies that may come your way. You can’t predict the future, but at least you’ll be ready for it.

If possible, you should try to have enough money saved to last you at least three to six months should you find yourself with a large repayment or out of work.

This is the ideal situation to aim for, but this is easier said than done as more and more people struggle to save anything at all.

If you find it hard to save, set yourself a smaller target to start with. Once you have hit this target, you can then add to it, building it up as you go. It might not be enough to cover you for unemployment or illness, but it’s a start.

If all else fails, ask for help

This is something everyone tries to avoid, but if you’ve exhausted all your options and haven’t gotten anywhere then it may be time to ask for some help.

However, if you’re turning to your friends or family, treat this with respect and caution. You don’t want to burn any bridges, so if you borrow from them make sure to pay it back.

Your situation may not last forever, but that doesn’t mean you have to struggle alone. There is help available designed to help those dealing with financial emergencies in a way that’s affordable to them.

Contact us today for free and confidential advice to help you with your finances. You can speak to one of our expert advisors by simply calling 0808 2085 195, through our live chat system or clicking below to arrange a callback.

You could write off up to 75% of unsecured debt with our debt assistant.

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