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Whether it’s an urgent car repair, a sudden home maintenance problem, or a surprise medical bill, unexpected expenses can throw a wrench into even the most well-planned budget. Knowing how to deal with these expenses can help reduce stress and improve your financial health. If you are in an economic crunch and need cash immediately, here are four ways to cover unexpected expenses.

1.   Build an emergency fund

One of the most effective ways to cover unexpected expenses is by creating and funding an emergency savings account. Ensure your emergency fund has enough cash to cover at least three to six months of your living expenses. This will help you endure financial emergencies and give you a solid buffer against hard economic times.

Do not tap into your emergency savings account unless it’s absolutely necessary. Only withdrawing from the account if not using the funds could substantially disrupt your life or when unexpected expenses need your immediate attention.

2.   Take out a personal loan

If you don’t have an emergency fund, consider applying for a personal loan from a bank, online lender, or credit union to cover unexpected expenses. A personal loan offers lower interest rates and can be repaid over an extended period. However, securing a personal loan involves a thorough application process and a good credit score. Be sure to compare lenders before taking out a personal loan to find the best terms. You should also not borrow more than you need to avoid increasing your financial burden.

If you’re struggling with bad credit and cannot secure a personal loan, visit https://www.mycanadapayday.com/ to apply for a payday loan. Most payday lending companies can process your loan even with a bad credit history. You will also likely get the cash within 24 hours.

3.   Borrow from friends and family

If you don’t want the hassle of dealing with banks and other lending companies, turning to a friend or family member for help is an excellent option. Borrowing from friends comes with favorable repayment terms and little or no interest.

However, tapping people close to you for financial help can ruin your relationship. Do not take this approach if you’re unsure about repaying them fully. You could even draw a formal loan contract to reassure your loved one of your intention to repay them. Ensure the contract is clear about the interest and repayment period to avoid misunderstandings.

4.   Sell unused items

If you don’t want to increase your debt burden, consider selling unused or unnecessary items to generate quick cash. Look around your home for items you no longer use. This includes collectibles, clothing, furniture, and electronics, to mention a few. Next, hold a yard sale or sign up on sites like Craigslist, eBay, or Facebook Marketplace, to mention a few, to sell the items quickly. This will not only help you cover an unexpected expense. It is an effective way to declutter your home.

Endnote

Paying for emergency expenses does not have to be stressful. Build an emergency fund, apply for a personal loan, sell unused items, or borrow from family and friends to raise the cash you need.