What Options Are Available To Cover Emergency Costs?

Many people pride themselves on making good financial decisions

. Whether or not your intentions were good or bad, mistakes and shortcomings do happen. For a large percentage of people, it is hard to control unexpected costs all the time. There are those times that extra money is needed to support a working budget, and without a savings account, people will need to look elsewhere.

Where do you go to make up for the extra demand on your income?

Some people do have a savings account. If you can manage to build up at least a few hundred dollars to cover emergency costs it helps buffer your bank account with a quick transfer to cover the costs. The key to making a savings account work is to make it part of your budget each month to make a payment towards it. When you treat it as another bill, you will be more apt to replenish what you had to take out.

Borrowing from family is one more option that some people have as a backup. It can get tricky with money transactions between family members. If you cannot return the money when you promised, there can be a wedge created between you and the lender. Family battles or lost relationships over money never returned or paid back late is a high price to pay for a loan. Unless your family member is well off and can afford to do without the money until you are ready to pay it back, you may want to find a new source of cash. If you do end up borrowing from family member, make the payment promise clear and get it down on paper. Place the payments on the top of your list so there are no lost relationships over the term of the loan.

Personal loans from a bank may help your situation, but the approval rate takes a few days. You will need to meet with a banker and supply them with your financial details, reason for the loan, and hope that your credit score is good enough to get you approved. Some banks also offer title loans for your vehicle and getting a second mortgage is an option for homeowners. Once again, your credit score will need to be in good standing. Bank loans to do not get processed quickly, so if you are in a hurry, they are not necessarily a solution to your emergency costs.

There are the no credit check loans such as payday loans, cash advances or car title loans. These loans have a bad reputation for high annual percentage rates, but in theory, the term on the loan should only last a few weeks. Some people use these loans as a way to make payments, but this usually ends up in continuous rollovers and high interest costs adding to the balance. If you are going to use one of these loans to help with emergency costs, they will only help your finances if you know you will have the money to pay them off quickly. Stay clear of pushy lenders for there are some bad apples in the bunch. Find a lender who offers loans within any state required guidelines. There are thirty eight states which have set regulations to help control any abusive practices and promote responsible lending and borrowing.

Finances are similar to your health. The more preventative measures you take to keep the balance, promote good habits, and plan for future years will help your finances in the long run. Savings accounts are a great asset when there are too many emergency costs at one time.

by: Jen Smart

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