We all want to be able to plan for our expenses, right? But, sometimes, even the best-laid plans go awry. Unexpected expenses have a nasty habit of popping up when we least expect them; car repairs, medical bills, or hefty utility bills can be a total Game Over for our finances.
Fortunately, surviving the unexpected doesn’t have to have a complete reset button. Now, with the following creative strategies, you’ll be able to keep your finances afloat and out of hot water.
1. Financially Frustrating Unexpected Expenses: Tactics to Stay Above Water
Finding your bank account suddenly short to cover an unexpected expense can be one of life’s most financially frustrating experiences. But, by following the right steps, you can stay above water. Here are five tactics to help you financially weather those unexpected expenses:
- Set up a Savings Fund: Establish an emergency fund to cushion against future surprise expenses. Setting aside part of your income monthly or bi-weekly, and dedicating it to all-purpose emergencies, can be a lifesaver.
- Cut back Expenses: After finding yourself in a financially-frustrating situation, it’s time to get creative with your spending. Take a long hard look at your budget and determine what can be drastically cut – and then do it.
- Rethink Debt: If your surprise expense requires even more financial capital than budget trimming can provide seek alternative solutions. Though credit cards, loans, and different payment plans can seem attractive – remember that they all come with debit. Therefore, carefully consider your options.
- Draw on Insurance: Whatever the surprise expense, it may be covered by insurance. Be sure to check with your insurer and find out what is and is not covered by your policy.
- Explore Flexible Solutions: See if your creditor will work with you, or, if you need more time to come up with the money, you could look for ideas like payment extensions or temporary payment reduction plans.
Though dealing with unexpected expenses can be a scary prospect, with the right preparation and strategy, it can be less of a burden. Follow the steps outlined above and stay one step ahead of the financial game.
2. Planning Ahead: Preemptive Measure to Shield Your Finances
1. Budgeting and Cutting Costs
If you’re looking to protect your finances, one of the best things you can do is budget carefully. Consider working out a comprehensive budget that details all of your income and expenses. Tracking your spending helps you identify where you can shave off unnecessary costs, while also giving you insight into larger patterns in your spending. Knowing where your money is going allows you to make deliberate decisions about where to save, and where you can allocate more resources.
2. Invest for the Long Term
Time is a great ally when it comes to big financial decisions. A strategy such as dollar-cost averaging can help you build a portfolio of long-term investments that can grow over time. It’s important to remember to keep some money liquid for short-term expenses, but investing for the long run gives you more stability as well as potential to reap bigger rewards.
3. Manage Your Debt
Debt isn’t always a bad thing, but if you’re not managing it properly, it can quickly become a major burden on your finances. Knowing your debt and understanding how to pay it down in a timely manner is key to protecting your financial health. Look closely at the terms of all your debt and consider any refinancing options that may be available to you. Prioritizing your debt and smart planning can help you stay on a successful debt repayment track.
3. Budgeting with Precision: Limiting Unexpected Costs
Budgeting is essential for keeping your finances balanced, and it’s even more important that you consider the risks of sources of unexpected costs. Accurate budgeting requires precision and a lot of evaluation. Here are 3 ways to help you get started.
- Create a Spending Plan: Setting a goal for yourself or your household is key to keeping things on track. Create a plan to outline what money will be going where and how often payments are being made.
- Track your Expenses: It’s important to stay on top of your budget and monitor the expenses that are happening month to month. Be sure to keep your receipts and credit card statements organized in order to find patterns in your spending.
- Beware of Unnecessary Costs: Be cautious of expenses that just don’t seem necessary and decide for yourself if the cost is worth it. This could include things like subscription services, online shopping, and credit card fees. Examine each purchase from all angles and ask yourself if the cost is justified.
Limiting unexpected costs begins with understanding where your money goes and making conscious financial decisions every single day. Keep in mind that budgeting requires time and effort but can save you from headaches in the future.
4. Avoiding Unconsidered Splurges: Think Twice Before You Buy
We all have our favorite brands and products that we’d love to splurge on! The thought of a new item can be exciting and promising, but it isn’t always worthwhile – especially when there are a lot of unintuitive costs involved. Here are some tips for avoiding those pesky unconsidered splurges:
- Compare options: Before committing to a purchase, take some time to shop around and compare different options. You may find a better model or brand for the same price.
- Think about long-term costs: Fix-it items are often far from cheap. So before you grab something on impulse, ask yourself if there’s a more efficient solution available. While the initial cost may seem tempting, sometimes opting for a more taken-care-of device will save you on long-term costs.
- Watch out for digital subscriptions: Subscribing to digital services, such as The TVPass, can be convenient but often comes with hidden fees. Be sure to read the fine print before committing to a subscription.
Too often, we don’t consider the finer points of our purchases. It is important to really take a step back and analyze what we are buying. Do some research, compare prices, and try to save money in the long run. A splashy purchase isn’t always worth the hassle.
5. Side Hustles: Generating Additional Income to Support Unexpected Expenses
It’s a good idea to have some additional income to manage unexpected expenses. Far too often, emergencies arise that requires more money than we might have available in the bank. Luckily, there are ways to generate additional income even with a full-time job or other commitments. Here are 5 side hustles you could consider to supplement your income.
Freelance Work – With the wide reach of the internet, there are various freelance work types available from blogging to bookkeeping. And you can always pitch your services on any of the various freelancing platforms available. A great thing about freelance is that it offers flexibility and the ability to work from anywhere.
Renting Out A Room – If you have an extra room in your home, why not get some rent money out of it? List it on Air BnB or rent it out to a friend or family member. That room can go a long way in helping you cover unexpected expenses.
Selling Stuff – The saying “one man’s trash is another man’s treasure” couldn’t be more true. So why not turn all the stuff you’ve outgrown or haven’t touched in ages into cold hard cash? You can do this through online sites like eBay, LetGo, and Facebook Marketplace. Here, you can list the items you wish to sell and buyers can make offers on them.
Social Media Manager – If you’re familiar with social media platforms like TikTok, Instagram, and others, you can offer your skills and services by becoming a social media manager. This part-time job requires engaging fans, creating posts, promoting brands, etc. All you need is to register and take Social Media Management and be armed with the necessary skills.
Start a Blog – You can use the power of the internet to start your own blog. This requires you to write articles and create content for your blog and then promote it and drive traffic. You can monetize your blog with ads and affiliate marketing. This is a great way to start making money for covering emergency expenses.
6. Taking Out a Loan: When You Need More Time to Pay
Sometimes, life can throw an unexpected curveball at you. You may be in a situation where you just need a bit of extra wiggle room to make ends meet. Taking out a loan can be a prudent way to manage such an emergency situation.
Before you sign on the dotted line, make sure you understand the terms of the loan. Some lenders offer flexible repayment options, including the ability to pay in installments over an agreed-upon period of time. This allows you to spread out the cost of the loan and pay it back at a pace that works best for you.
Consider how soon you’ll be able to pay the loan back, and make sure you calculate the total cost over the loan’s term. This includes an assessment of potential interest rates, discounts, and fees. Be sure to read and understand all of the loan’s conditions before signing, and keep the documents in a safe place for future reference. If you’re taking out a loan, it’s important to remember that this isn’t a long-term financial solution, but a way to bridge a temporary gap in your budget.
- Be aware of the loan terms.
- Understand the interest rates, discounts, and fees.
- Keep loan documents in a safe place.
- Remember the loan isn’t a long-term solution.
7. Window Shopping: Comparison Shopping to Find the Best Deals
Window shopping isn’t just a form of entertainment anymore, its a savvy shopping strategy for saving money. Comparison shopping is the key to unlocking the best deals. Here’s how it works:
- Look for deals online: Research the same product across different sites such as Amazon, Walmart, and Target. Compare different brands, prices, and shipping fees to see which offer is the best.
- Leverage store loyalty programs: Join loyalty programs at your favorite stores and cash in on exclusive discounts and rewards like store-wide discounts or points you can save up for free items.
- Check store circulars: Weekly store circulars are a great way to find out what’s on sale. They’re usually available to browse online, or you can find them in print newspapers or posted in store aisles.
When you’re window shopping, remember the old adage “the price is right”. Knowing when to buy is just as important as shopping around for the best deal. Regardless of how great the price may be, only purchase what you actually need and when you need it. Other than that, happy window shopping to land the greatest deals!
8. Utilizing Citizen’s Advice: Get Direction in Troubling Financial Situations
In today’s fast-paced world, tackling financial difficulties can be overwhelming. Not knowing which way to turn can be an awful burden. Fortunately, organizations like Citizen’s Advice offer free and impartial advice to help get you back on track. Here are some ways they can help:
- Provide Guidance on Money Worries – Citizen’s Advice have trained advisors who are available to provide essential advice on money worries. Whether it’s a question of budgeting, debts, financial products, energy bills, or any sort of consumer issue, they attempt to provide the right solution.
- Access to Financial Help – The advisors may be able to provide information on financial help from the government, such as State benefits or assistance you may not be aware of. Additionally, they provide information about consumer rights, as well as template letters for legal matters.
- Connect to Financial Services – Sometimes the advice they provide can assist in tackling financial difficulties, such as managing debts or assisting with redundancies. They may even be able to provide help in more extreme situations, such as helping to access independent welfare funds.
Citizen’s Advice has been advising people since 1939, focusing on helping those with the most vulnerabilities. They have famous ad campaigns such as their 2017 ‘Powerful Stuff’ where their message was that ‘things can change when you get advice’. By using this service, you’ll be on the path to getting back in control of a difficult situation and getting help to move forward and make a brighter future.
9. Seeking Financial Planning Advice: Guidance for Long-Term Fiscal Health
Are you feeling overwhelmed by the complexity of making financial decisions? A lot of people don’t realize that getting professional advice can help them to plan for their long-term financial soundness. Preparing for your financial future is easy when you take advantage of the help available to you. Consider the following five tips for seeking financial planning advice:
- Research: First and foremost, be prepared to do some research. Make sure that any advisor is properly certified – according to your state’s requirements – and ask questions about their fee structure, services, and experience.
- Education: Take the initiative and educate yourself about financial planning by reading books, websites, articles, and other professional resources. Understanding the basic concepts is a great place to start when you’re seeking help.
- Trust: You can’t control the markets, but you can control who you trust with your money. When finding an advisor, you should feel comfortable with the level of trust and communication between you.
In addition, keep in mind that a financial advisor might have different strategies for different people. So be sure to ask your prospective advisor about the strategies they recommend for your particular situation. Ask as many questions as possible to make sure they understand your goals and have the right plan for you.
It’s also wise to check out reviews and credentials for the financial planners you’re considering. Your advisor should be able to explain their approach in plain terms and help you to make the best decisions for your current and future finances. Reaching out and asking an advisor about their process is the best way to ensure you’re comfortable and confident before signing anything.
10. Making It Through: Creative Strategies to Weather the Unexpected Storm
We are in the thick of increasingly unpredictable times. There’s no guarantee anything will go as planned as we clash with the unpredictable nature of the world. What do we do when we come across an unexpected storm?
When life throws curveballs our way, we must think outside the box to find creative strategies to ride out the storm. Here are some options for testing the waters and emerging victorious:
- Take a serious look at expectations. Is it even possible for us to continue on our current trajectory? If the odds are stacked heavily against it, it might be time to start rethinking our goals and objectives.
- Don’t be afraid to look for help. We all face roadblocks at some point or another, and reaching out to a mentor, colleague, or friend can’t hurt in finding answers to the questions being asked.
- Ultimately, remain flexible. Changes in life can bring us new opportunities and experiences; if we accept these twists and turns of life, and not fight them with too much force, we can find the strength to keep our heads above the water.
The key is to stay positive and arm ourselves with knowledge. With creative strategies, and otherwise, we can weather the storm and move on to brighter pastures.
Surviving unexpected expenses can be a challenge, but by implementing creative strategies, you can keep you and your finances afloat! Remember, managing financial stress and unexpected expenses will require a combination of research, planning, and flexibility – but it can be done! So, don’t throw in the towel. Get proactive and start building your safety net today.