This is a contributor’s blogpost …
There’s one thing certain about life, and ironically it’s uncertainty – things can change at the drop of a hat. Perhaps you lose your job, or your landlord decides to sell up and you’ll be forced to move? Maybe you get ill or have an accident, or some other unplanned scenario that would have you needing access to money. If you ever do get in any such emergency, you’ll be glad you planned ahead. Here are some of the ways you can avoid a fiasco with your finances by being prepared.
Have a Rainy Day Savings Account
Every household needs an emergency savings account– a stash of money that’s not touched for any reason other than a genuine emergency. You might have other savings accounts that you use to save and buy things you want- this is great but keep them separate. Having a buffer, even of just a few hundred pounds can make a potentially very stressful situation a lot easier to deal with if you’re landed with an unexpected expense. Put away as much as you can and keep it there, you never know when you might need it.
Photo Courtesy of Pixabay via Pexels
It’s everyone’s worst nightmare. You come home from work and the front door is ajar, someone has gotten inside and taken your stuff … things you have worked hard for and aren’t easily replaced. While nothing can ever make this better, having insurance and being able to replace the items you’ve lost at least means you don’t end up out of pocket. Another unexpected expense in the home many people have to deal with is appliances breaking down. A washing machine, tumble dryer, fridge or oven can cost hundreds to replace. A good home insurance policy will cover these things, so it’s worth protecting yourself. Shop around, and make sure you read the fine print so you know exactly what it covers.
Improve Your Credit Score
Perhaps you need access to instant cash. Maybe your car has broken down, you’re stranded abroad, or some other emergency has cropped up. Being able to access money in an instant means you can quickly sort things out. Having a good credit score means that not only will you be accepted at more places making the process quicker, but you’ll pay less interest too. If your score is less than perfect no need to fret, you could look for the best loans for bad credit instead. But there’s no doubt a better credit score will give you a wider range of options. Pay your bills on time each month, and use a credit card sensibly to build up your score. A mobile phone contract, a store card, and a loan are also ways you can prove you’re a reliable payer. However, it’s important to use these options wisely. If you start missing payments or running over your available limit you will end up with a worse credit score than when you started.
How do you plan for emergencies and avoid getting into trouble financially?