An Emergency Fund works like a dream when you have enough money saved. But what happens if the emergency is bigger than your savings? No matter what crisis you’re going through, do not panic because you can be prepared for it.
KEY TAKEAWAYS
Here are 5 steps to take if your emergency is bigger than your emergency fund :
Step 1 : Pay only minimum payments on debt
In emergencies like job loss, switch to minimum debt payments and focus on essentials. Resume debt repayment when things stabilize.
Step 2 : Call and negotiate
If you can’t pay a hospital bill, contact the billing department for discounts, financial aid, or a payment plan.
Step 3 : Shop Around
When your car breaks down, shop around for mechanics and deals. If repairs are too expensive, ask for a basic fix to get you safely back on the road.
Step 4 : Make extra money. FAST !
Sell unused items on resale sites and consider side hustles for quick money.
Step 5 : Build up your emergency fund again
After an emergency, rebuild your fund quickly. Future crises will come, and a strong emergency fund will be crucial.
