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How To Handle A Financial Emergency With A Low Income

  • September 17, 2018

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How To Handle A Financial Emergency With A Low Income

An emergency hits you when you least expect it. That’s what an emergency is supposed to be. But it doesn’t stop it from disrupting your plans and efforts to maintain your bank accounts in the green. Today's contributed post helps us explore how to handle a financial emergency with a low income.

For families with a low income, an emergency can be the beginning of a long journey through debts and credit card bills. Whether it’s medical or related to the maintenance of your house or car, an emergency is, by definition, something you can’t ignore. Which leaves low incomes with only one way forward: Dealing with the situation as best as they can. Here are some ideas to help you tackle the crisis without losing your mind or damaging your budget.  

Not all emergencies have to break the bank

First of all, it is worth noting that an unexpected cost doesn’t have to go over the top. Many families with a low income worry about medical emergencies without knowing that through the Medicaid doctors they have access to health coverage that is designed to respect their budgets! You might want to check eligibility criteria if you’re unsure of where you stand. Similarly, emergency repairs in the home can also fall under the warranty of the item or even your home insurance cover. In other words, don’t panic before you’ve checked all your options.

Related: Emergency Fund: Why You Need this 5 Step Savings Plan

They ask their relatives for help

When you’re running out of time and budget to react accordingly, you might want to ask for help. Your relatives, depending on your relationships, can be able to support you through these difficulties. If you have decided to borrow from your family, you need to establish a clear and structured arrangement. Borrowing money from relatives or friends can be a cause of distress and conflicts if you don’t agree first on repayment terms and duration. Ultimately, if you want to maintain your relationship with your loved ones, you have to treat their lending as a professional transaction from a financial institution.

Related: 7 Family Budget Hacks You Need To Spend Less Money

They choose to DIY

For repairs that relate to home appliances and furniture as well as your car, you can save a lot of money through DIY – assuming you have the right tools and know what you’re doing. If you’re not an experienced crafter, it’s best to leave it to the professionals as you might increase costs. In addition, if it looks like costs might rise significantly, it would be wise to consult your home warranty coverage to help.

You can easily avoid leak issues in your plumbing system by fixing your shutoff valve. You can remove stains from your ceiling with a solution of 10% bleach, ensuring that you can paint over the area within a few days.

Related: 3 Ways To Save Money On Your Next DIY Project

You create your emergency fund

Last, but not least, while an emergency is unexpected it doesn’t mean you can’t prepare for it. Low-income families can start an emergency fund, which over time might be able to tackle repair and medical costs. Tracking your income and expenses can highlight areas of improvements, which you can direct into savings. Saving a small amount regularly can help you to handle significant invoices without worries. After all, every dollar saved goes towards ensuring your financial health and stability!

Related: 6 Best Tips For Starting Your Emergency Fund & Save Money

Should your income stop you from tackling emergency expenses? The answer is no. The more you plan, the better equipped you are to react accordingly and keep your budget together in troubled waters!