Financial health is a concern that we all have to keep in mind. We do our best to stabilize our incoming and outgoing money, taking care not to spend too much of our wages but allowing ourselves to indulge in entertainment and good food every now and then. It’s a good idea to be frugal since it’ll help you manage your finances, but what happens when something disrupts the balance you’ve created?
Large and sudden expenses aren’t as unlikely as you think. They can happen at any time, often causing a considerable dip in your finances and potentially eating into your savings. These situations can include medical fees, replacing an expensive appliance with no insurance, or even helping out a family member with their bills and debts. We can’t predict these expenses, so what can we do to cope with the aftermath?
Coping with the idea of spending a lot of money
If you’ve built up a frugal mentality then the idea of spending a lot of money in a single go can be difficult to cope with. You might struggle to go through with a large expense, prompting you to look for alternate solutions. While this can often reveal different ways to cope with large and sudden expenses, it’s going to depend on the circumstances you’re in.
It’s common for people to feel guilty about spending money. You can consider this the polar opposite of someone that spends money without thinking about the consequences. Unfortunately, it can be just as detrimental to your way of life as overspending is. It’s a good idea to remind yourself that, in many cases, these sudden expenses are completely unavoidable. In fact, you should try to plan ahead for these potential expenses by contributing more to your savings. That way, you’ll have a larger pool of savings to use and won’t feel as bad when you use it.
Seeking financial assistance to help recuperate
Paying for a large expense usually means spending your savings. This is why it’s always a good idea to put money into a savings account (or withdraw it and keep it in something like a lockbox or safe), so you have it for a rainy day. However, if you don’t have enough savings to pay for it, then you might end up in the red for a month or two. When this happens, it’s important to seek financial assistance to help you recuperate from those losses. Thankfully, there are a couple of ways to achieve this.
First, consider seeking compensation if the expense is related to an injury or medical bills. For instance, if you were in a car accident and have to pay to repair your vehicle and your hospital stay, then you should be able to seek compensation if the accident wasn’t your fault. Alternatively, you may want to consider short-term borrowing services like Buddy Loans to help pay for essentials until the end of the month. This is usually the preferred option as loans typically won’t affect your financial health if you can guarantee that you’ll pay them back.
Have a plan to recover your finances afterwards
Nobody likes to spend a large sum of money in a single go, but if it’s unavoidable, then you should at least have a plan for afterwards. For instance, you may want to consider making more savings for a short time. This could include avoiding any nights out, cooking instead of ordering food and potentially cutting subscriptions to entertainment services for a month or two. We suggest writing down some steps to follow so that you can always keep them in mind. By having a plan to help you recuperate, you’ll be back on your feet before you know it.
Keep in mind that everyone’s situation is different and you might be in a position where you can’t really recover in a short amount of time. For example, if you were in an accident and can’t return to work due to an injury, then you should rely on sick pay from your employer or compensation from an injury claim.
Coping with a large and sudden expense can be challenging, but with the right approach, we believe that anyone can weather it and recover their financial health in a short amount of time. It’s all about being prepared, knowing your options and understanding the services that can help you recover from your losses. These are the three key components to dealing with a large and sudden expense.