Ideally, you should have some money set aside to cover unexpected emergencies. However, many people do not have anything in their savings. In fact, it is estimated that 80 percent of people have little or no savings. Fortunately, there are ways that you can handle a financial emergency even if you do not have any savings.
How To Handle An Emergency Financial Situation
Ask For A Payment Plan
Many people will ignore their bills if they cannot pay them. However, this is not a good idea. This will only make the problem worse. Bill collectors understand that things come up. The earlier you talk to them about this problem, the more likely they will be to work with you. You may be able to get a lower payment. Your bill collectors may also give you more time to pay your bill.
Find Ways To Get Extra Funds
There are many ways that you can get extra funds. For example, if you have items that you do not need, then you can pawn them or sell them. You can also offer to house-sit or babysit for someone. Additionally, you can offer to clean houses or wash cars.
Ask If You Can Borrow Money
It can be difficult to ask for money even when you really need it. You may feel as though you are putting a burden on your family members and friends. However, if they have the funds, then they probably will not mind helping you until you get on your feet.
It is not ideal to take money from your retirement account. However, this option can help you overcome your financial difficulty. If you have a Roth IRA, then you can withdraw funds that you have contributed from the account without penalties and taxes.
Credit cards can be a useful tool if they are used wisely. You can use the card to pay for your expenses and then pay it off later. If you cannot afford to pay the whole balance, then you can make monthly payments. However, you will be able to save money in interest by paying off the balance at one time.
If you do not have a credit card, then you may want to consider taking out an installment loan. These types of loans are a good option because you can make regular monthly payments on the loan until you fully pay it off.