Where’s the money for surprising expenses?
Did the washing machine break down and home insurance refuses to pay anything? Or is the car suddenly in need of repair? Whatever the cause of the unexpected spending of money, you should carefully consider how to finance the unexpected costs in order to save you from further cash problems in the future.
Who is responsible for paying the costs?
Before you pay for any unexpected expenses on your bag, you should make sure you are actually responsible for the expenses. In the case of rented homes, broken appliances, such as a refrigerator, are mostly the responsibility of the homeowner. The product warranty may also apply and replace the defective device.
A credit card can also help with the replacement of goods. If a damaged, lost, or stolen product is paid for by credit card, you should check to see if the card covers product protection that replaces the item.
Financing with own money
Of course, if you are responsible for paying for unexpected expenses, it would be ideal for self-financing your expenses. For example, many have saved money in a separate buffer fund for a bad day. If you do not already have a buffer fund, you should definitely start saving first.
Another way to finance unexpected expenses from your own bag is to sell unnecessary items. In this way, there are actually two flies in one stroke; firstly to get rid of the useless strait and secondly to improve one’s own financial situation. Nowadays, there are many websites on the web that sell and sell items quite simply, and the good old flea markets are still popular.
Financing by loan
Sometimes unexpected costs simply cannot be financed from own resources, and borrowing is the only option. In practice, there are two options for borrowing: a loan from a bank (or other financial institution) or a credit card.
First, whether it is worthwhile to finance the expenditure with a loan or a credit card depends firstly on the required amount. Credit limits on credit cards are often in the order of a few tons, so at high costs, the loan may prove to be the only option. If you can get the amount you need with both a credit card and a loan, it is definitely worth calculating which way you will be able to afford the purchase.