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Disaster Relief: What to Do with Unbudgeted Expenses |
By Andi Mariategui on July 13, 2010
.jpg.aspx?width=75&height=75) Building a reliable and realistic budget is the best way to avoid debt and financial crisis. This involves calculating and setting aside costs for bills, groceries, education, health care, and the like. While putting this budget together, you should keep in mind that unplanned expenses might come up at any point. Build an emergency fund of about three to six months of your income for these unforeseen costs or emergencies.
But even if you build the perfect budget, costs can still arise that you didn’t plan for. Maybe someone in your family gets sick and you are uninsured, or you are involved in a car accident and your insurance won’t cover all of the damage costs. Whatever happens, it might exceed the money you had set aside.
When this happens, there are a few options for covering your expense. If it is a health-related emergency, you can talk to your doctor or hospital about setting up a payment plan where you can pay the bills off over time. Use money from your entertainment and leisure costs, which should also be added into your budget. If it involves your house or car costs, like a fire, flood, or car accident and your insurance won’t cover the full expense, you can usually work out a payment plan with your insurance provider as well.
If you find yourself in this situation, you should avoid payday advance cash loans. These loans pay you in cash before your payday so you can pay off any expenses that arise before your paycheck comes. However, these loans carry high interest rates, and repaying the interest can often put you further into debt than you were before taking out the loan.
Although it’s a long, tedious process, these unforeseen costs can be taken care of through hard work and self-control.
Note: Many medical providers will pressure you to pay for medical bills using credit cards. However, you are almost always better off setting up a payment plan with the biller directly, which can keep you from paying finance charges on the balance. |