Adult life comes with what seems to be an endless array of obstacles and challenges that stand in your way. Tackling these challenges is just a part of life, and depending on who you ask, are the real life that we live. One of the many obstacles that life throws into people’s ways is unexpected expenses. They can come from all over the place but are impossible to prepare for and can leave you in a compromised position for your financial future. Here are three ways that you can pay for unexpected expenses in your life.
Tap into Emergency Funds
The first thing that you can do to pay for unexpected expenses that come up in your life is to tap into your emergency funds. Everyone should save an emergency fund to be used in the event of unexpected financial expenses that come up. Start by putting away as much as you can afford each month until you have built up an emergency nest egg that is about six months of living expenses. You can save as much as one year of expenses in an emergency fund to be extra safe. Tapping into your emergency funds prevents you from needing to go into debt.
Use a Loan or Credit Card
Another way that you can pay for unexpected expenses is by using a loan or a credit card. If you can’t afford to pay off your expenses with a debit card, check, or cash, then you can take out a personal loan or pay with a credit card for your expenses. A personal loan can give you quick access to cash when faced with a sudden large expense. This can be useful for situations where you might want additional cash. Using a credit card is another option but be aware of high interest rates on your cards.
Tap Into Home Equity
If you have a large expense that you can’t pay for but own property, you can tap into some of your equity in order to pay for your expenses. Taking out equity in your home is the same idea as selling a portion of your home back to the bank. This can allow you to access some of the value of your home while still getting to live in your home.
Unexpected expenses are bound to happen, but that doesn’t mean that you have to worry about paying. Try these three methods to pay for unexpected expenses as they come up.
Check out this article on how to not let your home consume your entire budget!