Overview
Everyone runs into unexpected expenses from time to time. If you don’t have a cushion of savings, it may be challenging to cover such expenses. In this article, we will review five common methods to deal with budget shocks.
Method #1: Use Your Emergency Fund
If you have an emergency fund, use it to cover your unexpected expenses. This is the optimal way to handle budget shocks, given that you’ve specifically set aside money for such emergencies.
According to one poll, nearly half (45%) of Canadians lack emergency savings. This means they cannot comfortably cover emergency expenses. If you are among this group, you may need to look for alternative methods, such as using a credit card or reviewing your budget.
Method #2: Ask Family or Friends for Help
While money tends to complicate relationships, asking your family member or friend for help may be a viable alternative. Family members and/or friends may be willing to offer a loan without interest or with low interest. Banks may have stringent criteria – e.g. they may require a high credit score – or exact a high interest rate and fees, while those close to you may not have any such requirements.
Method #3: Use a Credit Card Cautiously
If you cannot cover your unexpected expenses with existing savings, you may opt to use a credit card instead. Ideally, you would choose a credit card with a low interest rate or a 0% initial APR offer. Pay for the expense with your card and chip away at the balance steadily until it is fully paid off. To avoid interest charges, pay it off in a timely manner. If you cannot pay it off within a month, adhere to a strict monthly payment schedule to minimize interest charges.
Method #4: Apply for a Loan via OntarioCASH
Another way to deal with unexpected expenses is to apply for quick funds via OntarioCASH. We don’t check credit during the online application process. Just make sure you have a realistic repayment strategy and account for applicable interest and fees. A word of caution: quick funds from an online installment lender may help you cover immediate expenses but are not intended as a long-term financial solution.
Method #5: Suspend Pleasure Spending for a Time
You may need to pause your spending on things like your daily coffee, dining out, or travel for a period of time, until you have paid off your more urgent expenses. This may require strict adherence to a budget over weeks and months as well as forgoing some pleasures you may be used to, such as buying coffee at large coffee chains or buying new clothes.
Final Thoughts
You can use any of the above methods to help cover immediate expenses. If you need quick funds, you may consider applying for a personal loan via OntarioCASH. No credit checks are performed during the online application process.
