When Money Emergencies Strike, Do This First

(MoneyHippo.com) – When the coronavirus pandemic shut down the world in March 2020, the event caught everyone off guard, leaving many jobless and scrounging to support their families. Consequently, many discovered how important it is to have an emergency fund. Yet, saving takes time and, well, money. So, what can you do when the next emergency happens before you have a chance to build up a fund without landing in a worse position than when you started?

First, try contacting your creditors and asking for holds on your accounts or see if they can defer payments until the emergency passes. If you don’t ask, you won’t know how willing they might be to work with you. Also, weed out everything from your budget except necessities like food, clothing, medicine, and shelter.

Consider looking at household items and asking yourself if you really need them. Selling unwanted possessions could add up to what you need to take care of an urgent matter and get by without too much collateral damage.

After determining you’re dealing with a genuine emergency, you could consider approaching a bank for help. If you have good credit, you could ask for a personal loan. Also, if you’re a homeowner with equity, you could borrow against the value of your residence to pay for the emergency or refinance your property.

Losing your primary source of income can have immediate and devastating consequences. If you face the situation, file for unemployment right away. The process can take time, so the sooner you apply, the quicker you could have money to pay your bills.