Building Funds for a Major Repair
Are you financially prepared for a major repair like replacing your HVAC system, getting a new roof, fixing the freezer, or taking care of a problem with the car? If not, you need to create some sort of emergency resource to help cover the expense. There’s more than one way to set up a contingency plan and be prepared for any type of unexpected household repair. Consider these approaches and see what you think.
Setting Aside a Few Dollars Each Payday
It takes most of your paycheck to make ends meet. Even so, there are likely a few ways you can set aside a few dollars each payday. It may involve trimming unnecessary expenses, but having a little cash tucked back is a good thing.
Take lunch to work three or four times a week instead of running out for fast food. Cook more evening meals at home and eat out less often. When you can, freeze leftovers and use them to make new dishes like soups or casseroles. You’ll be surprised how these measures free up funds that you can set aside for any type of financial emergency.
Looking into Small Loans
It never hurts to check out local lenders who offer short-term loans. Even if you don’t have the best credit, there are lenders who provide quick installment loans that can be approved in less than one business day. Make sure you research them in advance and ask if they have any type of pre-qualification process. Doing so ensures that if you need quick cash to repair the transmission, you will have it in hand by the time the work is done.
Keeping a Credit Card or Two in Reserve
Using no more or no less than 20-30% of your available credit is good for your FICO score. It also means that you can draw on that additional limit if a sudden home or auto repair arises. To make sure the card is ready for emergencies, tuck it away in a safe place at home. That lowers the temptation to use it for non-essentials and allows you to retrieve it when a real need arises.
Selling or Pawning Valuables
Keep a list of things around the house you can pawn or sell if necessary. Ideally, they should be things you can do without until they can be retrieved from the pawn shop or replaced. Home electronics, jewelry, and firearms are a few examples of valuables that are likely to fetch enough cash to cover your sudden need.
Generating Additional Revenue to Set Aside or Pay Off What You Borrowed
How much stress would paying back a loan put on the household budget? If it would be hard to manage, consider finding ways to generate additional revenue. A part-time job is one possibility. You can also think about finding ways to make money online. The latter is great if your full-time job requires you to work different hours each week since you can work around whatever schedule you are assigned in a given week.
When you’re not using the proceeds from these efforts to pay off a loan or retrieve something you pawned, keep setting the money aside in some sort of interest-bearing account. That will help you be better prepared the next time an emergency arises.
Even if you don’t earn a lot of money, there are ways to be financially prepared for a major repair. Try one or more of these approaches now. Doing so will help you build up reserves, know where to turn if you need more, and have a plan in place for paying off the debt.