Even though you may think you have your finances well under control, there always comes a time when an unexpected expense could potentially send your situation into a quick downward spiral. Whether it’s from an unexpected doctor’s bill or a broken-down washing machine, when it comes time to drop a big chunk of change, you need to be sure you’re prepared for the expense. It’s times like these that you may want reconsider how you manage your finances. Many car owners to turn to title loans to help in these types of situations, but here’s some strategies you could use to help you prepare for your next big purchase.
One of the smartest moves you can make to prepare yourself for the unexpected is to open up a savings account if you haven’t already. Arming yourself with an emergency fund gives you a safety net between you and a financial catastrophe. Make it your goal to set aside at least $1,000 by creating a budget that allows you to pay yourself a set amount each month until you’ve reached this goal. Having this savings account is a great way to avoid a situation that would otherwise leave you broke and scrambling for fast cash.
Whenever you receive a bonus check from work, money from relatives on your birthday or even just a few extra bucks from helping someone out with an odd job, make it a point to set aside that money for potential cash emergencies. You may be tempted to treat yourself by spending this money as soon as you get it, but the best thing you can do with this extra cash is to save it for later. Your future self will thank you.
This is a financial tactic that has stood the test of time because it works and it’s an easy concept to grasp. First, figure out how much money you need in order to cover a month’s worth of bills. Then, make it your goal to save up this amount over the course of three to six months (or sooner if you can). Once you have this money set aside, keep it in your checking account and forget about it. Better yet, transfer this money into your savings account so you won’t be tempted to spend it. Having a month’s worth of expenses covered in advance will make it easy to overcome just about any unexpected bills that come your way. Give it a try and see how much better you’ll sleep at night knowing you’re prepared for just about any situation that comes your way.
These aren’t the only ways you could prepare yourself for unplanned big- purchases, but they certainly are a great way to start building a more secure financial future for you and your family. Decide which strategies that work best for you and use them to insulate yourself from the unknown. When it’s all said and done, being prepared is always worth the effort.