What are Unexpected Expenses & How to Manage Them? Learn 5 Strategies!

Did you ever receive a bill that you did not expect to blow your savings wide open? Well, they can really be a significant source of stress and anxiety. This can really be frustrating because you are caught off guard without knowing what to do next.

But you’re not alone. Most people experience some shocking bill at some point during their lives. The important thing is to know how to handle them. Whether you are falling into a financial pitfall or you are just preparing yourself in advance for facing one, this article can help you. You are about to discover not one, but five possible solutions.

One option is an emergency loan. These are personal loans meant to give you the fast, quick excess to funds when you need it most. For instance, you can use an emergency loan from MQL to pay for a medical bill, car repairs, or just a utility bill that was a little higher than usual. Read on to find out more!

What are Unexpected Expenses?

Ever faced sudden or unexpected incidents that require a lot of money? That’s an unexpected expense. What are the most common types of unexpected expenses that you will come across in life?

● Medical Emergencies

You can manage routine check-ups, medications, and small illnesses. But when you get car accidented or have a ruptured appendix, then that’s a different story altogether.

● Pet Emergencies

When your furry friend is in a critical accident or sudden illness, your greatest priority is getting them the help they so desperately need. Unfortunately, when the crisis has ended, you are left with a large veterinary bill.

● Major Auto Repairs

Whether due to an accident or everyday usage, these car repairs that pop up out of nowhere can be quite steep in price.

● Major Home Repairs

Sometimes, not much needs to be repaired in your home for years, and sometimes, everything breaks down at the same time. So, if you have a good credit score, you can easily take an online personal loan of up to 1 lakh to manage emergent situations.

● Unplanned Travel

Whether it is the baby shower of your sibling or the funeral of your grandparent, an unanticipated journey can easily clean up your wallet.

5 Strategies for Managing Unexpected Expenses

Here are five strategies, according to experts, which you can use to deal with unexpected expenses and keep your financial situation in check.

1. Work Out a Payment Plan

You probably will be able to come up with a payment arrangement with your service providers. Most medical providers, for example offer payment plans for the patients who would not be in a position to raise all the money at the same time. Ask your landlord or utility company or other service providers if they have payment plans. Ask them how much fees and interest you are added.

2. Use a Credit Card

Paying for unexpected expenses or even larger purchases using a credit card may be a smart strategy when you don’t have cash. Many credit cards give rewards or cash back on purchases that can offset the cost of the expense, but make sure you pay the balance back as soon as possible to avoid interest charges.

3. Take an Emergency Personal Loan

You may consider a personal loan. Loans of this nature do not expect collateral and can support you when some unexpected expense has to be met. They might come in handy when your borrowings are of the bigger ticket, which will be impossible to settle all at once. Many FinTech companies offer personal loans as high as 1 lakh. That really comes in handy when you need a small amount of loan quickly.

4. Borrow Against Your Insurance Policy

If you have a life insurance policy, you may be able to borrow from the cash value of the policy. In theory, this can be an effective way to get some cash to you, provided that the borrowing is made in small amounts and repaid reasonably quickly. Note, however, that borrowing from your life insurance reduces the value that will be paid on your death as a death benefit to your beneficiaries.

5. Take Help From a Friend or Family Member

In summary, never rule out asking a willing friend or family member to help pay unexpected expenses with the latter on loaning money to you. Discuss about the terms and conditions of the loan, including repayment schedules and interest, or fees that apply. It is an excellent option when you borrow money and can pay back in a relatively short amount of time.

You can work out a payment plan, take out a credit card, emergency loan, borrow from your life insurance policy, or even borrow from a friend or family member. Be sure you calculate the pros and cons of each type of loan and borrow the one from which you can comfortably emerge safe and sound. Manage your finances well by being proactive on unexpected expenses and keeping your peace of mind alive.

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Author Bio: TanviKaushik specializes in Content Marketing and works with the Digital Team at KreditBee – India’s fastest personal loan platform where self-employed and salaried professionals can easily avail of personal loans in just a few minutes when in need of quick funds. Tanvi writes to-the-point articles on personal finance and budgeting which are truly appreciated by her readers. She is committed to making money matters easy to understand even for the layman. Her commitment to her work doesn’t stop her from pursuing her hobbies of hiking, trekking and going on adventurous trips.

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