Financial Emergencies

Life is unpredictable and you can very really fully prepare for its unexpectedness. It will take you by surprise. But you’ll get a good amount of security and confidence if you can pay for financial emergencies with a very handy solution.

It All Begins with the Emergency Fund

The emergency fund is a padding for all things emergency — whether it’s a bill you missed, a sudden medical or home expense or for any other thing that is urgent and needs financial solution. Dave Ramsey suggests that you keep at least $1,000 for emergency expenses. This is often enough to cover expenses like trips to the ER or having your car fixed. Once your finances are stable, you should strive to gather at least 3 months worth of money in your emergency fund. This amount will help you address emergencies that may last for a longer span of time, such as when recovering from an illness and you’re unable to work.

The best thing about having an emergency fund is that you don’t need to ruin your budget or touch your savings just to solve a financial emergency. It can be a savior all on its own.

Financing Options During an Emergency

If for some reason you do not have an emergency fund or no savings when an emergency strikes, you can begin exploring your financing options. If you need a relatively larger amount, say $2,000 for the emergency, you can consider getting personal loans.

Since personal loans are fast and easy to obtain, they can work as your second layer of financial cushion. You can even get personal loans just by applying online. This speedy nature of personal loans make them an appealing option especially for urgent monetary needs.

Another great feature of personal loans is that they’re also available for borrowers with bad credit. What this means is that you can have bad credit yet still be able to borrow personal loans quickly and easily. Personal loans for people with bad credit can make a world of difference especially since most mainstream lenders have stringent requirements when it comes to credit score. If you have bad credit, your loan application can get rejected.

This is not the same for personal loans for people with bad credit provided by third party lenders. You can take personal loans for financial emergencies in the most stress-free way.

Qualifying Financial Emergencies

It is utterly important that you protect your emergency fund with all your might and use it only when needed. You also should only take personal loans during a financial emergency. With that said, you have to make sure that your situation is truly an emergency.

To do this, check if it’s urgent or necessary. You have a financial emergency if your electrical connection is about to get disconnected, but it’s not an emergency if you want to take a vacation. It’s an emergency if you can’t put food on the table and keep the lights on. It is not an emergency if you want steak for dinner or if you need the latest model of flat screen TV.

If you know what’s important and what truly matters to you, it’s easy to check if your situation is an emergency or not. Only use your emergency fund or take personal loans for people with bad credit only when it is necessary and urgent. Otherwise, keep them out of your mind and save up for the non-emergencies.