How To Deal With Big Unexpected Costs
Even the best budgeters can get caught out by big surprise costs. This could be anything from emergency medical treatment to a fine to having to pay for a loved one’s funeral. Whilst it can seem like a financial disaster at the time, there are always options for dealing with such costs if you don’t have the money currently available. Here are just a few options to consider.
Postpone a big planned cost
If you had a holiday or a wedding planned or were saving up for a new car, you may have to postpone this purchase and let this emergency cost take priority. This can be hard for many people to do, particularly if you’ve had your heart set on this big planned cost. However this sacrifice could prevent you getting into debt. Also the word ‘postpone’ is important to consider – you’re not cancelling this big planned cost, but rescheduling it for a later date.
Look for special credit options
Loans can come with interest loaded on top. Before considering these, try special credit options that may be interest free. For an unforeseen medical cost for example, a CareCredit card could allow you to pay off the medical expense over a long period without having to pay interest on top. Also consider loans from family members and friends that may be interest free. Asking these people can be hard but you may find many are willing to chip in, especially if there’s a tragedy behind the cost.
Take out an emergency loan
Emergency loans can get paid out to you quickly and generally don’t require you to have a clean credit history like many other loans. The downside of these loans is that they often have high interest rates attached. Emergency loans are also generally unsuitable for large expenses, with many capped at $1000. You should shop around online for different rates, but also read reviews on sites such as Trust Pilot as some small lenders advertising great interest deals can turn out to be dishonest.
Know your legal rights
You may sometimes be able to contest a large cost. For example, if you’ve got a DUI fine that you believe was given out unjustly (or could have even more expensive ramifications such as losing your job), you may be able to hire a criminal attorney to negotiate the fine. In other cases, you may be able to fund an unexpected cost with a lawsuit. This could include a personal injury claim for a medical expense or a costly car repair.
Look into preventative measures
Once you’ve dealt with a surprise cost you should then consider whether preventative action is worth taking to stop it happening again. This could include an insurance scheme such as property insurance to prevent another expensive burglary (burgled properties are often likely to be targeted again). Another option could simply be to set up an emergency fund. This could be a flexible savings account or simply a lump of money set aside for a rainy day.
