Dealing With an Unexpected Bill: A Guide

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Unexpected Bill

By its very nature, an unexpected bill always comes as a surprise. They are hard to avoid, which makes them somewhat inevitable for everyone. There are many different forms of unexpected expenses, some of which might be pretty mundane and others that could constitute a significant emergency. However, regardless of the size of the bill, it is not always easy to deal with them. Therefore, it is imperative that you have a plan in place; read on to learn more.

Review Your Budget

First thing first, are there any areas within your budget that you could streamline in order to cover the cost of the bill? This is definitely the easiest payment method, but it is not always feasible, especially if the bill is larger. If you can put some money aside by going without something else for the week, then you should do so. For example, if you cut out the takeaways or stay in, or put a pause on the online shopping, then if the bill is small enough, you might be able to cover it. If you do not currently have a budget in place, then this is definitely something you should consider. It can free up some cash and show you where you are overspending.

Consider Your Savings

What else are your savings there for if not to use for an unexpected bill or expense? Dipping into your savings is another easy option when it comes to dealing with unexpected costs. Ideally, you should aim to have a couple of months’ worth of expenses in your savings should something arise. However, some people are reluctant to use their savings because they are working towards something specific; perhaps they are saving for a house or a car and dipping into their savings is not something they want to do. Therefore, you should always use your savings first if you are able to.

Assess Your Options

Depending on the bill, you might be able to negotiate more manageable terms from the merchant or service provider. Ask them if you can set up a payment plan to break the bill down into more manageable chunks. You can then spread the cost over several payments instead of taking the financial hit all at once. You could also ask for an extension on the payment deadline. Of course, some businesses won’t go for it, but it is always worth asking the question.

Sell Some of Your Old or Used Items

If you need to generate a bit of extra cash to pay off the bill, then you can consider selling off some of your unwanted items. A lot of people have some clutter in their homes that they could get rid of. Selling your unused items is easier than ever, thanks to the internet and mobile phone apps. From Gumtree to eBay to Depop to Poshmark to Vinted, the options are truly endless. There is something out suited to whatever it is that you end up selling. You can get rid of some clutter and make some extra money to cover your bill while you’re at it; it’s a win-win.

Cash In Your Investments

If you have some money languishing in an investment fund, then a financial emergency could signal that it is time to cash in. On the other hand, if your money is doing well, then it can be tempting to want to leave it in there, but you need to cover the bill. Cashing in your investments means that you don’t have to streamline your budget or dip into your savings which might make it a better strategy for some people.

Use Your Insurance

This is not an option for all bills, but it can be for some. It is what the insurance is there for, after all, to give you a little extra financial security when you encounter an expense. While taking out insurance does constitute an extra monthly expense to account for, it can save you money in the long run. For example, pet insurance can save you an awful lot of money when faced with vet bills. Or you can use your home insurance if something happens to your house. In addition, comprehensive car insurance can cover you if you find yourself in an accident, even if it was your fault.

Ask for Help

If you are fortunate enough to have a solid support network built up of friends and family, then you can ask them for help. Some people will give you the money, no strings attached if they are in the position to do so. Others might offer to pay the bill for you in the short term, and then you can pay them back over time or when you are able. While it isn’t nice to feel as though you are in debt to your friends or family, it is often a better position to be in. You won’t be charged interest, and you have more leeway when it comes to a repayment schedule. Remember, if the roles were reversed, you would want to help them if you could.

Consider a Payday Loan

Payday loans are a great way to help you deal with an unexpected expense, especially if you don’t have very much in your savings or your family and friends aren’t in the position to be able to help you. Pay Day loans are a temporary short-term solution. They are far quicker to obtain than a personal loan from the bank. You should consider them if you need money urgently and the options mentioned above aren’t feasible for you. Some payday loan providers have high-interest rates, and they don’t offer long enough repayment periods. However, this is not a problem with Payday UK; their interest rates are more affordable, and you can take out a loan over a three month to thirty-six-monthperiod, which makes it easier to then pay off the amount that you have borrowed while still having enough money to live on for the rest of the month.  

Take Out a No-Interest Loan

A no-interest loan could be another viable choice for you if you are facing a larger unexpected bill. As the name suggests, there is no interest to pay, and so as long as you meet your repayment deadlines, there is no issue. You can retain control over your finances. For these types of loans, you need to go through a bank or another loan provider. The application process takes time, and you won’t necessarily be approved. If your unexpected bill comes with a looming deadline, then this option probably won’t work for you.  If you are considering this option, then make sure that you do your research before you apply. Always read the small print and check your liability should you miss a payment.

The Bottom Line

As mentioned above, there is nothing that you can do to safeguard against or prevent an unexpected bill from occurring. Instead, it is necessary to have a plan in place to deal with those unforeseen circumstances. The above solutions outline your best options depending on the situation that you find yourself in. However, before you commit to anything, take a second to take stock of your situation and consider the merits and pitfalls of each option before you commit to one.