An unexpected bill or expense is enough to leave anyone in the lurch, life has a habit of sneaking up on you with these things and catching you completely off guard.
It could be anything from the washing machine packing up to a car breakdown or even a disaster like a fire or flood emergency, where you need access to cash and fast.
Whatever it is, finding yourself in a situation where you need money fast can be incredibly scary. Since most of us are only ever two paycheques from being made homeless an unexpected expense can bring a tremendous amount of worry and uncertainty.
So what do you do if you’re landed with a bill or expense that you can’t pay?
Negotiate
In the case of unexpected bills, your first port of call would be to phone the creditor or person who issued it. If you’re completely honest and explain your situation to them, you should be able work out a payment plan that suits you both.
Don’t just bury your head in the sand and hope it will go away, this will only make the situation worse and will cause you all kinds of further stress.
For the most part companies do understand that these things can happen and large bills can catch people off guard, and they know that you can’t get blood out of a stone.
As long as you’re proposing a suitable payment plan (even a temporary token payment plan of £1 a week is better than nothing) or setting a date for when you can pay in full, you have nothing to worry about.
This isn’t something you can do in the case of things like broken down cars, however if it’s your washing machine or other important appliance that’s gone you do have options.
Locate the brand’s helpline number and give them a call, if it’s out it’s warranty period you will be offered a couple of different options for paying for a repair.
Most will offer a one off repair cost or a monthly payment plan spread over a year. That way you get the appliance fixed without having to shell out for a new one.
Ask Friends and Family
Image Source – By Lucas
When something goes wrong in life, having a good support network around you can make all the difference. Try speaking to friends and family, and don’t feel too proud to ask for help. Even if they can’t assist you out financially they still might be able to help out in a number of ways.
Using the washing machine as an example, they might know someone who has recently upgraded and is selling their old one or could ask around for you. They might know someone handy that could repair it for free or even be able to fix it themselves.
Even just having a supportive shoulder to cry on and someone to talk it out with might mean you can work out a solution. If you’re struggling with money but have a friend or family member who is willing to help you out, always draw up a repayment plan on paper so you know exactly how much you owe.
Be sure to set it at something you’re both happy with, but that is affordable and realistic for you to pay back. Don’t just pluck numbers and time frames out of the air and let them down at a later date, work out exactly what your budget allows for.
Sell or pawn items
This article states that there’s up to £1000 of unused possessions lying around in people’s homes. You could find items to sell and have a declutter at the same time.
Try listing things on ebay or sell them to an online company that buys used technology. You could hold a boot sale, list items on Gumtree or on other local classifieds sites.
Alternatively you could pawn a more expensive item for some quick cash and then get it back again when you get paid.
Ideas for things to sell include good quality clothes, shoes and handbags that you no longer wear. Old mobile phones, games consoles, games and dvds. Broken, scrap or unused jewellery.
You could rummage in your attic and have anything that looks like it could be an antique valued. Who knows, you might even hit the jackpot and realise you’ve been holding onto something worth a lot of money for all this time.
Make Cutbacks
Sift through your budget with a fine tooth comb and see where you can make cutbacks, even if they’re in the short term. Can you walk or cycle to work instead of spending extra money on petrol?
Can you reduce your shopping bill, or downgrade your TV and broadband package? Are you spending on things that you can do without for a while like social activities, takeaways and hairdressers?
Removing these little luxuries is never much fun, but if the money needs to be used elsewhere then it’s important to prioritise. Once you’re back on track you can always add them back into the budget again.
Tighten the belt and make some cutbacks. Rework your budget to free up some much needed cash.
Useful: Best Apps and Banking Services for Budgeting
Take Out a Loan
If you only need money for a short time and know you can afford the repayments, then taking out a loan could be the way to go. If you have a good credit history you’re not likely to encounter any problems.
But if it isn’t perfect (or you have no credit history) and you’re rejected by mainstream lenders, you could consider payday loans as an option. It’s a way to get money quickly in an emergency, just be sure to lend responsibly.
Work out your budget and ensure it will allow for the repayments without causing money issues. This is a good way to deal with that broken down car, it could also cover a broken or painful tooth needing emergency dental care or anything else when you need the money there and then.
Find Out If You’re Entitled to Help
Depending on your circumstances you might be entitled to help from the government, if you claim certain benefits or have a low income. Calling your local citizens advice bureau, Jobcentre or a benefits helpline will give you the information you need.
Emergency assistance such as hardship loans and the Social Fund can also help some people out in times of financial difficulty, and charities also often have grants and schemes available.
Again the Jobcentre will be able to let you know if you’d be entitled to any of these, if you need the help and you’re eligible then it could be the way out of a bad situation.
Take on Another Job
Image Source – By David Simmonds
Earning money from a second job isn’t going to get you quick cash, but if you’ve managed to negotiate for time with a lender then it can boost your earnings and allow you to pay it off quicker.
You could take on a few hours a week working with an agency, or earn some money working from home. Taking surveys, writing articles, tutoring, there are even call centre and sales jobs that you can do from home these days.
You could offer to do jobs for friends and family for some extra cash- cleaning, babysitting, even car washing. Check out local classified ads like Gumtree for casual work too, there are often people looking for cleaners and ironers for a couple of hours a week.
It might not be a lot but it can all help you to earn a bit extra, and get back on your feet. Be aware that if you start earning money for services you’ll need to inform the HMRC and pay tax once you reach a certain threshold.
Get Insured or Save Money
Having a rainy day fund- access to some cold hard cash in case you ever needed it is always beneficial. But there are a couple of reasons why it might be better to go another way about it.
First of all if you know you’re the sort of person who will dip into the money for reasons other than an emergency. It’s pointless to save money and spend back into it. If something happens and it’s already been spent, you’re no better off.
Secondly, if you’re dealing with debts then saving money can be counter intuitive. This is because you’ll save more money on interest by using any savings to bring down the debt balances. In this case, in order to protect yourself you can get insured instead.
Home insurance will at least cover you if anything important stops working in the house. An extended car warranty will ensure you don’t get caught out by expensive repairs and pet/ dental/ whatever else insurance will protect you in case of an emergency if these are the things you’re worried about.
It might feel like an expense you can do without to save money in the short run, but if the worst happens you’ll know that you’re covered.
So as you can see, there are things to do if you’re caught short with an unexpected bill or expensive. The key is to stay calm and work out your plan of action. Once it’s under control, you can take steps to make sure that you’re covered in the future.
