You may have heard the phrase “Saving for a rainy day”. This refers to the fact that it makes sense to save for a time which is not very bright and happy. For instance, the air-con or heating system in your home may break down unexpectedly.
Saving on a regular basis means that you have enough money to help make this type of “rainy day” go away. You can pay for repairs to be done. This is obviously good news. However, if you have not been saving for very long, an emergency may happen before you have enough savings to meet the cost. There are things that you can do if this happens.
Revisit your budget
You should have a budget in place, to help you organize your spending. As part of this budget, you should plan to save around 20% of your income each month. If you are faced with a situation where you need more cash, you should take a look at your budget. Doing so means that you may be able to move money that you had listed for non-vital expenses such as clothes shopping.
Borrow a small amount of money
If you find that your savings are not sufficient to meet the cost of an emergency when it happens, you could think about taking out a small loan. Doing so means that you can meet the cost of the emergency and pay the loan off within a short period of time.
Do not just choose the first option for resolution
When you are in an emergency situation, it can be tempting to simply choose the first option you come across. For instance, if your heating breaks down, you may just search online for professional repair and choose the name that is top of the list.
This is not always the right thing to do. Unless the situation is desperate, such as if your home is flooded, you should take time to clear your head and make good decisions. Get several different quotes and remember to research costs before you pay. Doing this does not provide you with any extra cash but it can reduce the amount of additional cash that you need.
Sell items that you do not need any longer
If you have things in your home that you have kept hold of “just in case”, your rainy day may be a good time to get rid of them. You should go around your home and look for items like these. You will need to be strict with yourself and gather as many items as you can which have some value. Then you can sell these items at a car boot sale or online, using sites such as eBay.
Ideally, you should have enough savings to deal with a “rainy day” situation. However, if problems happen before you have enough money to resolve them, these are all methods that may be useful to you.