Overview
In life, unexpected expenses are inevitable. The question is not whether they will happen – it’s when. Therefore, being prepared for such emergencies is the best thing you can do to safeguard your peace of mind.
However, now that you’ve been hit with unexpected expenses, you need to consider several different methods to deal with them. In this article, we will review five tips to handle a sudden spike in expenses.
Tip #1: Use Your Emergency Fund
According to Statistics Canada, one in four Canadians are unable to cover an unexpected expense of $500. Almost half (44%) of Canadians at the time of the survey (2022) said they were very concerned with their household’s ability to afford housing or rent, and the situation has likely worsened since then.
If you do have an emergency fund to draw upon, now is the time to do so. It’s the best method to deal with unexpected expenses, given that it eliminates the need for costly borrowing options.
However, if you do not have any emergency savings to fall back on, consider setting aside a small amount of money per month. Even $10 a month will make a difference. Aim to have three to six months’ worth of expenses saved up in the event of a job loss, car repairs, or other emergencies.
Tip #2: Use a Credit Card – with Caution
To pay for emergency expenses, you may consider using a credit card. Choose a credit card with a low interest or a 0% initial APR if you have one. Don’t use cash advances, as they come with high fees and immediate interest. Pay for the expense with the card and aim to pay it off as soon as possible. If you delay paying it off too much, you will be charged interest. If you can’t pay it off all at once, commit to a monthly payment to reduce interest.
This should not be a constant solution to your financial problems. Ideally, you would aim to build a cushion of savings to help you weather financial storms. Start small and build from there.
Tip #3: Pause Your Non-Essential Spending
Review your typical monthly expenses. How many of them can you do without? Perhaps you have a habit of buying a daily coffee at a large coffee chain, getting lunch outside, or purchasing new gadgets. Hold off on pleasure spending until you successfully pay off your most pressing expenses. Consider using budgeting apps, a spreadsheet, or even pencil and paper to keep track of your expenses and ensure that you’re making the most of your income and spending your hard-earned dollars wisely.
Tip #4: Borrow Funds from a Friend or Family Member
Money can be a tricky element in relationships. However, borrowing from a friend or family member may be a viable option. Friends and family members may offer a zero- or low-interest loan, rather than the higher-interest loan you may get from a bank or an online installment lender. Therefore, you may want to ask your family member or friend for help. Just make sure you pay off the loan in time, to keep money from spoiling your relationship.
Tip #5: Apply for a Loan via LendProConnect
Another option is to apply for a personal loan online via LendProConnect. The online application process is quick and easy, and there’s no need for any in-person appointments. You may get fast approval and quick access to funds. Make sure you fill out the form to the best of your ability. The amount you get approved for may depend on different factors. If you have any questions or concerns, don’t hesitate to speak with your lender. It’s always better to keep the lines of communication open. Lenders may be willing to defer your payments.
Final Thoughts
You may tackle unexpected expenses in a variety of ways. Applying for a personal loan via LendProConnect is one option. Choose the option that best corresponds to your interests at the time. We don’t check your credit score or credit report during the online application process, so individuals with less-than-ideal credit scores and histories may still qualify.
