span usually, unexpected expenses arrive at the worst times. Whether it’s your washing machine breaking down or the car needing work, it always takes you by surprise. However, even though these things can happen at any time, it doesn’t mean you can’t protect yourself and your loved ones from the expense.
So, to protect yourself financially in the future, here are the best ways to protect you and your loved ones from unexpected costs.
Set Up An Emergency Fund
Setting up an emergency fund is a great way to prepare for the unforeseen. As a general rule of thumb, you should have three months’ expenditure in your fund to cover the cost of any expensive items.
However, if you get to three months and nothing has used your emergency fund, there is no reason why you can’t keep topping it up until it’s needed.
The key to not dipping into it for any other reason is to give it a purpose such as car repairs or breakages.
Take Advantage of Employee Life Insurance
Many companies now offer their employees a life insurance policy as a perk of the job. This ensures that if you get injured at work or have a death in service, then the company will payout.
This is a secure way to cope with those expenses and other payments that will build up. It will also allow you time to deal with the traumatic event and still be able to pay the bills.
If you don’t have any savings or emergency funds, then another way to deal with unexpected expenses is by obtaining interest-free credit.
Because it is interest-free, it will only cost you the amount borrowed. However, it is important to keep up the repayments on these loans and to only borrow what you can afford.
Borrow Money From Family
One of the most popular ways to borrow money in an emergency is from friends and family. In most cases, they are unlikely to charge you interest and there are no credit checks or long forms to complete.
It is important to note that ensuring you pay back the money promptly will save any uncomfortable conversations in the future.
Use a Credit Card
Another popular source of emergency cash is a credit card. These cards will give you a credit limit that can range from 500 to 25,000.
However, using a credit card will usually involve added interest. Because some credit card companies charge around 20% interest, you want to be paying this back quickly or it can become expensive.
There is usually a minimum amount that you have to pay off your credit card each month. However, you should aim to pay more if you can to keep the balance down.
And there you have it – a few ways you can protect yourself and your loved ones from unexpected costs. Protecting yourself and your loved ones from unexpected costs isn’t always easy. However, if you can build up savings, an emergency fund, and get life insurance cover, this will be a far better way of dealing with expenses than getting credit.