What’s your primary move when you need money immediately? Do you use your savings or contact someone for help? Most individuals rely on savings and use it. However, some lack sufficient cash backup. Here, they resort to roommates or known ones for help. It is the shortest you can accomplish tocounter the cash need. What if you lack savings and cannot contact anyone? It could be due to a new place or the city. It is indeed an unfortunate situation to encounter.
Nobody wants it but still plans for it. You, too, should identify the worst financial situations and plan. Setting up a crisis budget, savings account or investments may help. However, how would you counter the situation currently? Don’t panic. The blog lists the best strategies to manage financial needs. Let’s begin with the basics.
What is a financial emergency?
It is a situation where one encounters an instant and urgent cash need. It could be a medical emergency or home emergency repairs. The event does not come after the invitation. Instead, it hits the doors unexpectedly. It requires persons to act instantly in each situation. For example, you may face a car accident.
You cannot get urgent medical assistance due to a lack of cash or a card. Moreover, you are not in the position to manage one. It requires someone’s assistance for cash help. The delay may aggravate the situation. It can raise the sincerity of the damage. Thus, hold cash backup or access to instant cash products. It will help you face the requirements instantly.
What should you save despite having a low income?
According to the Money.co.uk report, individuals save the most for rainy-day expenses. It is a fund for minimal expenses. It differs from the emergency fund, which is usually for major cash needs. Here is a brief of what the report reveals:
Other reasons the individuals save include- medical emergencies, holidays, job loss or tuition fees. The amount each person saves varies according to age.
| Age | Money individuals save per month (pounds) |
| 18-24 | 2481.46 |
| 25-34 | 3554.16 |
| 34-44 | 5995.92 |
| 44-54 | 11013.99 |
How much should you ideally save as a safety net?
According to NatWest, “One should have at least 3 months of living expenses in a safety net.” Ideally, you must save for 6 months and keep the money safe. However, most individuals struggle to reduce expenses to have budget flexibility. A simple solution to that can be:
- Step 1- Identify the total expenses
- Step 2- Analyse the unnecessary expenses
- Step 3- Reduce, eliminate, or restrict useless expenses
It is the easiest way to increase savings. Moreover, Lewis Broadie, Natwest Saving Expert, says-
“Customers who build saving tell us the best way to save is by setting up a goal. The aim should be personal, and one must commit to it. Put a small amount towards the goal each month. It is easier for regular earners with low liabilities. All these savings reduce worry and instil confidence to face the unknown.”
Thus, the amount you must save depends on your income and circumstances. There is no fixed amount to save.
For example- if you earn £45000 but £35000 goes towards liabilities, save at least £2000/month for emergencies. Do so for 6 months. If you continue the savings, you can save £12000 by the end of the 6th month. If you want, you can continue the savings.
7 Strategies to Counter Financial Emergencies Quickly
By now, you know the best aspects to save for and the amount. Decide according to your income, liabilities, and savings. However, how will you counter a cash requirement when you need money now? Here are some aspects that might help you:
1) Analyse current savings
You may have multiple incomes. If not, you can consider investments as one income. Dividends, savings, and part-time income can help. Check how much you can collect. Calculate the total amount you have in savings. Keep them against the requirements. Sometimes, it may not fit the need. Move on to the next step- seek additional cash help.
2) Check possibilities for instant cash
If savings do not suffice, other options may help. Individuals living from paycheck to paycheck can hardly save. Thus, you may need financial flexibility to bridge the need.
Get verified loans for low credit scores by proving your affordability. It helps counter the need immediately without bothering about credit score. However, you must hold a regular income. The amount you get depends on your needs and affordability. No loan provider lends more than you can pay back. It is one of the easiest ways to tackle an emergency.
3) Ask your employer for an advance
Yes, your employer may help with a cash transfer. You can request advance payment before the salary day. Be transparent with the reason. It will help you meet the critical emergency quickly. However, you may only get help if you have good connections with the person. Individuals with good work profiles may benefit from this. The amount you get depends on the purpose and how the employer takes it.
4) Sell out some clothes or old stuff
It is the fastest method to get some currency. You may earn £10000 within an hour or so. Identify old stuff lurking in your home. You may find ample objects. It could be technical gadgets, clothes, books, etc. Identify the conditions before putting them up for sale. Always keep the amount aim in mind before selling. Keep the cash requirement flexible to meet the needs without worries.
For example- if you need £15000 immediately, you sell old clothes for £6000, books for £4000 and gadgets for £5000. In this way, you can accumulate the instructed amount without worries.
5) Request payment from the client
It may help if you work as a self-employed/ part-time or freelancer. You may have sent invoices to your respective clients. However, only a few pay on time. Here, you can request the other clients to pay a small sum, if not full. If they consider you good for their business, they may help.
It may help even if you get £10000 when you need £12000. Getting something is always better than getting nothing. You can narrate the requirements, and some genuine clients may be obliged to do so.
6) Consider a payday loan
It is the best option for individuals with consistent but low income. Check it by analysing your needs. Identify the amount you need to meet the requirement. Usually, you don’t get over £1500 for the needs.
However, most emergencies require only £800 and £1000. Thus, it may be helpful in that case. You may get one without providing a decent credit history. The loan provider considers the person’s ability to afford the loan. If you can pay the dues without affecting the budget bottom line, you qualify.
Note: It is a short-term loan with a repayment period of 12 months. Thus, analyse the amount and repayment term according to your income and liabilities.2/41\2-
- Consider fixed-deposit money
It is the last but a nice way to tackle emergency expenses. Your fixed deposit may reach the maximum by a timeline. You can benefit from the added interest and amount after that. Check such policies and tap it for the amount. It may help you meet the required needs without other’s help.
Bottom line
One does not have the time to respond to an emergency. You can use this article as a list to analyse your needs and save accordingly. It also lists the ways to tackle emergencies with zero savings. It is helpful for unemployed or financially struggling people. Aspects like quick loans may help you meet the requirements. Check what fits your needs the best.
