You can’t predict when your car might break down, your washing machine might spring a leak – or a global pandemic might strike.
But you can prepare for unexpected expenses with some fairly simple strategies. So, when the next challenge pops up, you’ll be ready to ride it out without too much stress.
Hit with a one-off cost out of the blue?
If your car does conk out, or your washing machine leaves you high and dry, there’s a couple of options to help you make it to next payday.
Have a look at your budget – the best thing about a budget is that it’s flexible, so you can take unexpected expenses (relatively) in your stride. You may be able to cut back your spending, or shift some outgoings to next month and pay for those car or washing machine repairs without too much bother.
Cash in that rainy-day fund – depending on how much you need to fork out, you could cover some (if not all) of your unexpected expense without denting your usual spending.
Haven’t got a rainy-day fund? Don’t panic. It’s super simple to start one using the Yolt Money Jar. Plus, Jar Boosters, like The Round Up, can help you grow your savings automatically. Easy peasy.
Use your savings – they’re like your very own personal lender. Take enough money out to cover the surprise bill, then gradually build your savings back up by repaying what you can, when you can. It doesn’t matter if you do this over the next eight days or eight months – what matters is that you keep topping up your savings, so you’ve got something stashed away for the future (not to mention funds for a dreamy future holiday).
Adapting to cope with longer-term changes?
If your circumstances are set to be longer-term – for example you’ve been hit hard by furlough or are being chosen for redundancy – and your salary is likely to be squeezed, you might need to take a slightly different approach.
Take a deeper look into your budget and try to cut down on spending so you can stretch your money even further. If you have a rainy-day fund, you could use it to bolster your monthly budget for a while, before you start dipping into your hard-earned savings.
Haven’t got a budget? There’s no better time to create one. And you can forget the spreadsheets – make things simple by using Yolt’s Budgets feature.
Your savings are a safety net for times like these. Sure, we’d rather be spending them on a sunny holiday, but they can really come into their own in unexpected situations. Focus on making your savings last as long as possible and don’t worry about how you’ll pay them back – that’ll come when you get back up and running.
Feeling overwhelmed? Follow our 5 ways to reduce money anxiety and change your money mood.