We live in a fast-paced economy and our comfort and security often depends on how well we manage our money. When our expenses exceed our income, for one reason or another, we experience money problems.
When you experience an unexpected financial issue, it can occur for all sorts of reasons:
You might have lost your job and be one paycheck short of covering your rent or mortgage for the new month. Even if you do apply for unemployment insurance, it might take awhile to be approved. It’s also possible that you may not be eligible because you could not establish that you had lost the job through no fault of your own.
You might have experienced an unexpected financial emergency that needed to be resolved right away. You may have had to visit an outpatient medical clinic that required a cash payment. Your car may have broken down on your way to work. Or, a water pipe leak in your house may have suddenly come to your attention.
When these things occur, what should you do? You need to do two things: one, take care of the financial emergency; two, create an emergency fund for the future.
Taking Care of a Financial Emergency
If you can, you should borrow the money or sell off something that will bring you immediate cash flow. Unfortunately, you may not know anybody who is willing to loan you the money and you may not have anything that you can sell quickly.
In this case, another option is to research installment loans online provided by an alternative lender. Some lenders can give you up to $1,250, which you can then pay off in installments. These are not like bank loans, where you need to offer collateral and require a lengthy approval process. Instead, you can receive the funds you need quickly by simply verifying your income source, providing a social security number, and showing that you have an active checking account.
Creating an Emergency Fund
What should you do after you manage to pull yourself out of a tight spot? While most people will simply pick up where they left off, this is not an entirely sensible way to live. Unless you develop an emergency fund, you may have yet another crisis in the future that will again wreak havoc on your nerves.
Unfortunately, it’s not easy to create an emergency fund. In fact, the reason why you may not have one in the first place is because you don’t have much left over after your paycheck to put any aside.
Here are two strategies to create an emergency fund:
- Get a side hustle.
Since you are probably not likely to get a raise soon, your best alternative is to create a side hustle. The ways to do this is by making an inventory of your skills to see how you can monetize them.
Here are some examples:
- If you’re good at fixing things, you could put a classified ad in your local newspaper to help householders with small maintenance tasks. For instance, you might be able to work as a handyman on weekends.
- If you’re good at math, you could run a tutorial service for students in grammar school or high school struggling with math.
- If you’re a good writer, you could write a Kindle book.
- If you’re an excellent bargain hunter, you could create an eBay seller account to resell things that you’ve found at garage sales or thrift stores.
- Get better at managing your money.
By managing your money better, you might be able to squeeze a little money at the end of the month to build up your emergency fund.
Here are 3 ways to manage your money better:
- Review your expenses and cut down on things that you don’t need to buy out of necessity.
- Find ways to reduce your monthly bills.For instance, if you live in an energy deregulated area, you might be able to shop around for a cheaper provider of gas and electricity.
- Create a budget to track where your money is going. It’s difficult to manage your money when you aren’t even aware of all the little things you’re doing that are depleting your funds.
Earn More, Spend Less
It can be difficult to get ahead financially when faced with a dearth of opportunities. The trick is to set aside a little every month to avoid living from paycheck to paycheck. You can do this by increasing how much you bring in and by finding ways to stop unintentionally overspending your money.