What to do in a Financial Emergency!

Financial emergency

Be it the middle of a pandemic or some accident that just occurred, emergencies can happen for anyone at any time. No matter how much you prepare, there is always something surprising in a financial emergency. In most cases, these emergencies have a financial aspect associated with them.

So, despite your preparations, what to do in such a crisis?

Assess the Situation

Breath. Even if the world is ending, it’s okay. You need to bring yourself into this mindset, so you have no mental pressure and don’t make any rash decisions. Everything will be okay. Since finances can have a long-term impact, you need to think this through with a cool head.

Now, assess the situation. How much money does your emergency require? Do you have enough in cash or your bank account? Maybe you lent some money to a friend and can ask for it back. Taking note of your liquidity in the form of cash, bank, and any receivables will help you make an action plan.

Separate for Essentials

There are some expenses you can put off for later; so put them off, even if it means not being able to buy your best friend a birthday gift or take your boss to a fancy restaurant. If you have enough for the emergency now, but it will make your upcoming payments difficult, it is better to negotiate. Talk about possible delays in mortgage payments or credit card instalments. Your lenders may offer a lower interest rate to maintain some form of cash flow. If you have a good credit history with them, they will probably be willing to help you out as much as they can.

No matter how many expenses you put off, there are always some essential ones. Food, rent, bills that can cut off your utilities, medicines, or anything necessary cannot go unpaid for a longer time. Take note of these and separate enough money for them. Now that you have a list of things you can put off for later, notice how much cash is available for the emergency.

Evaluate Your Options

After all that assessment, you may still fall short. But there are always many options available for financing. Selling your assets is probably not the best one. Especially if it is a high-value asset, you do not want a bad deal on it. Don’t let anyone take advantage of you and give you a lower quote.

However, there are still some personal assets you can sell for a quick buck. You can try a garage sale, but it may take a lot of time. Selling any upcoming concert tickets, an expensive suit, or a bag you bought online or to your social circle will help you get some quick cash.

Not everyone has items that can be sold or enough time to sell them so, now what? Borrowing money is an option to consider. Maybe you will consider borrowing from your family or friends, but the situation may persist if they are short on cash too.

A quick loan offer can save the day. Quick loans offer money but very quickly. You can apply for a quick online and have that money transferred to your account on the same day. Some of these are not dependent on your credit history, so don’t let a bad credit history discourage you.

Ask for Assistance

Securing loans is not easy, so if your application gets denied, don’t feel bad. From unemployment benefits to small business loans, NGOs and government bodies can help. There are community centres and social programs in place that are meant to help people with emergencies.

From welfare support to visa fees, there are many programs geared towards certain emergencies. Accidents and severe financial hardships are also covered. It is always a good idea to search for financial assistance programs and apply for them. Asking around your circle about them might also help!

Looking Back

People save and invest in making sure they never have money troubles, but financial emergencies arise for everyone. After being through such a situation, you will reconsider your savings, look for lower insurance rates, evaluate your investment options and if they can be converted to liquidity quickly, and a lot more. Even though you cut down expenses and plan and budget meticulously, no person can be fully prepared always.

Life is not set in stone and is full of surprises. You can make the best backup plans and still not feel equipped enough. If you have faith in yourself, you can turn any crisis into a momentary obstacle.

Financial emergency article and permission to publish here provided by Alex Chapman. Originally written for Supply Chain Game Changer and published on August 23, 2021.