Though you may pretend you’re cool and collected when it comes to your finances, all it takes is one unexpected bill to expose your gooey inner center, excitable and nervous. If you expect to keep your composure the next time you face a financial emergency, you need to work on your plan of attack. Use these tips to help create one that works with your financial situation, and you’ll be able to face anything with grace.
Preventative work will help you keep a level head in an emergency
Though you don’t want to believe it, it’s almost guaranteed you’ll face a financial emergency that stretches your finances too thin. You could rear-end someone accidentally and have to pay out of pocket to cover the damages. Your sub pump could breakdown and you need to pay a professional to remove the water from your basement. Whatever it is, your emergency could push your adrenal glands into overdrive.
Dealing with anxiety on top of your financial emergency only makes things harder for yourself. Your mental health relies on your ability to find your financial Zen in the face of these difficulties. This is easy advice to give, but it can be a challenge to follow when you’re in the thick of your emergency. You’ll have a million and one things competing for your attention as you consider your options.You can help reduce your stress by knowing how you’ll pay for auto repairs or a flood restoration before these things happen.
Saving for the future takes a complicated plan of attack
Saving for an emergency fund is your number one defence against financial induced-stress. Financial experts suggest saving 10–20 percent of each paycheck for this purpose. They suggest dividing this between debt reduction, an emergency fund, vacations or big purchases, and retirement.
It may take some time before you’re used to reserving this much of your paycheck, as it leaves you with less expendable cash to use as you like. If you don’t have a contingency plan during your adjustment period, you won’t be any better at managing these emergencies than when you started.
It’s crucial you remember a company like MoneyKey when you’re still building your emergency fund. They offer you a quick way to get a payday loan online, so you can make immediate repairs and payments on bills — with or without savings. Their online platform processes applications ‘round the clock, and they can connect you with a cash advance within one business day. Quick and convenient, they provide a practical stopgap for your savings until you’ve managed to save enough for the next emergency.
Make a budget and prioritize your expenses
A household budget has calming effects on your nerves when it comes to an emergency. The chamomile tea of your finances, it frees up your cash, so you can meet the recommended 10–20 percent savings. But first, you have to track your expenses for at least three months. Long-term tracking gives you a broader perspective on how you spend your money. Once you start categorizing your typical expenses, you’ll start to see patterns in your spending.
Rent, utilities, and other necessities will be your most obvious spending habits. A budget is at its most useful when it exposes the less obvious patterns, like how much you spend on takeout lunches during your work week or how much you spend on parking fines over the course of a full year.
You don’t have to cut out every single purchase to create savings. In fact, most financial experts don’t suggest taking such an austere approach to your finances, as you can experience emotional burnout when you don’t do anything fun to break up the monotony of saving. However, you should prioritize these expendable expenses, limiting yourself to only the most important ones and cutting out the rest. You can divert the cash you would have normally spent on takeout and put it towards your savings.
It’s all too easy to lose your cool when facing a financial emergency. Whether it’s a household repair or an unexpected bill, you can keep your composure by knowing your plan of attack. Use these tips to guide you through your next emergency, and you’ll find it easier to cope with your financially stressful situation.