Financial Emergency? Keep Calm and Follow These 5 Steps
The BBC has reported interesting findings from a Money Advice Service (MAS) study, which suggests that over 16 million UK residents have less than £100 in savings. But a lack of savings is not just a trend found in the UK and is something unfolding across other wealthy nations.
With an increasing number of people having little to no financial cushion, it makes a financial emergency even more daunting. So, what should you do if you find yourself needing cash fast without significant savings?
The Most Common Financial Emergencies
There could be an array of reasons why you need money quickly. Financial emergencies can strike households in an instant with no prior warning. Some of the most common reasons for a financial emergency include:
- A broken-down car (needed for work!)
- Broken white goods in the home
- Medical expenses
- Loss of employment or regular income
In recent times, COVID-19 and travel rushes to beat quarantine restrictions are also causing financial problems. Sky News reported that flights from Paris to the UK are costing almost seven-times as much compared to before the UK announced quarantine measures for those returning from France.
Five Steps to Take When a Financial Emergency Strikes
1: Keep calm!
The first thing to do when needing money quickly is not to panic. Sounds easier said than done, but once you have researched your credit options, you will soon realise that there is a viable solution to most financial emergencies.
2: Research Your Credit Options
Once you have calmed down from the shock of needing to find money quickly, it is time to start researching your credit options. The first point of call could be friends and family who can help you out with a simple bank transfer. But if this is not an option, there are others that can help.
The good news is there are dedicated emergency loan providers that are available online 24/7. Providers like Wonga can offer affordable emergency loans to get you through a tricky situation.
3: Apply for Credit Sensibly
In an emergency, it can be easy for us to lose some perception and erratically apply for credit with multiple creditors in the hope one accepts us quickly. But in reality, this is a bad move. Applying for credit leaves a mark on your credit file and could be harming your chances of actually getting it. Take your time to choose a creditor and apply for one before moving on if needed.
4: Deal with the Financial Emergency
Once you have the money in your account, it is time to deal with the financial emergency and pay the mechanic, doctor or use the money in another way that the situation calls for.
5: Plan for Future Financial Emergencies
Experiencing a financial emergency should make you want to prepare for any future financial emergencies by starting to save more regularly. Come up with an action plan to create your own financial cushion in case another unforeseen event occurs.
Next time, you might not have to apply for credit or ask a mate!