How to Prepare for Financial Emergencies

The best way to prepare for financial emergencies is to maintain a savings account. That may seem impossible when living paycheck to paycheck, but it really is not. The point of saving money is not to place large chunks of money in an account all at once.

It is to put a consistent amount away every pay day and then leave it in the bank. That can be as little as five dollars. It will grow until it is needed. The hard part is leaving it there as it increases. Financial emergencies are unpredictable so preparation is essential.

A Credit Card

Credit cards can get people into more debt than they can handle, but they can also come in handy. That all depends on how they are used. If a few credit cards are used to purchase desires instead of needs, they will be maxed out quickly.

That is not helpful when the car needs repairs. Keeping one credit card strictly for emergencies will mean it is available when needed. Place that card in the back of the wallet or leave it at home when going shopping to avoid using it by mistake.

Dealing with Emergencies

There may be times when financial issues arise before preparations can be made. If possible, borrow the money from a family member. The situation may be uncomfortable until the loan is repaid, but there will be no interest to pay.

A bank or credit union loan is an option. A small personal loan can be approved quickly in most cases. This will work if the emergency happens to fall on a week day. It is not an option for those with no credit, or a poor credit rating.

Alternatives

When all else fails, an alternative lender will provide fast cash. An installment loan can be applied for directly online and approval ratings are very high. Approval can take as little as a few minutes. There are a few things to keep in mind.

Interest rates will be much higher than those of a traditional lender. Fees and penalties for late or partial payments will also be high. Do not take out an installment loan if making payments will be difficult. Compare lenders before applying. Those interested can look at this site for detailed information.