When Your Rainy Day Fund Has a Rainy Day: What to Do About a Large, Unexpected Expense

by Darwin on September 2, 2016

It would be unusual if you were to go through your adult life without encountering a problem with an unexpected bill or expense that you hadn’t budgeted for in your finances.


Your car is a good example, as it almost has a sixth-sense on when would not be a good time to breakdown, like a week for you next get paid, so that it can do just that. There are short-term options like Moneyboat loans for instance, which could help you to get the cash you need in a hurry, especially of your rainy day fund is also a bit depleted or bereft of money.


Addressing the problem


If you are suddenly confronted with an unexpected bill that needs your urgent attention, a fundamental piece of sound advice is to make sure that you don’t ignore the problem.


Financial obligations don’t just disappear if you try to ignore them, and in a lot of cases, the problem will often just get bigger if you don’t address the issue and find a way of sorting it out that everyone is happy with.


If it is a reminder for a loan or a credit card payment that is overdue, you may have thought that you had more time to sort it out, but the one thing not to is ignore the problem.


Take a look at your finances and work out where you are, so that you can get a clearer idea of when you will be able to make the payment. Then contact the lender to agree when you can pay if it is a loan, or sort out a way to bridge the gap in your finances so that you can sort it out any pressing bill that just won’t wait any longer.


Revise your budget


If you find yourself running short of cash on a regular basis, that should give you an idea that it would be a good idea to review your current spending pattern and revise your budget where possible.


It is always important to have a clear idea of exactly what you are spending each month, so work on putting a budget together that details all of your expenses in one place. Seeing where all of your money is going and where savings could be made in your spending habits, should enable you to free us some spare cash and put some money aside, so that you can cope better with the next unexpected financial emergency.


Feasible ways of raising some extra cash


There has been a growth in pawnbrokers and it is quite likely that you will have one fairly near to where you live, and they could provide you with a way of generating some extra money, if you have something to pawn.


The way a pawnbroker works is relatively simple. If you have an item of value, you can take it to them and they will lend you some money against the value of that asset, keeping hold off it until you repay the money borrowed plus interest.


There are definite risks attached to this idea, as you will have to pay interest on the loan and if you can’t repay the money when it is due, you could end up forfeiting the item, which will be sold to pay back your debt instead.


Do some extra work


The most viable way of earning some extra money without it costing you anything other than your time, is to sign up to do some additional part-time work.


If you have some evenings and weekends available, you should be able to find some temporary and part-time employment opportunities that could help you to boost your income and help you to get some money behind you in savings.


It goes without saying that taking on a part-time job won’t solve your immediate cash crisis, unless you are going to be paid in cash straight away, but in terms of forward-planning, it does at least give you a chance to generate some much-needed extra income.


Sell unwanted items


Many of us have some old mobile phones, CD’s or DVD’s that we no longer want, so it makes sense to consider selling these for some instant cash.


There are several websites who offer to buy your old mobile phone for cash and you will also be able to find somewhere to sell your other unwanted items for a cash sum, like Ebay amongst others.


If your finances get caught short unexpectedly, you should be able to find a way of sorting it out and then putting a plan in place to try and boost your rainy day fund, for the next surprise bill.


Nicholas Krauspe writes about personal finance, his articles appearing on numerous blogs around the internet. He focuses mostly on writing about ways to increase savings and decrease spending.


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