According to a survey we recently did, 58% of Americans took steps to address an unexpected expense since the beginning of the COVID-19 pandemic. Many of us didn’t feel prepared to handle these expenses. And if it was a medical expense, more than four in 10 Americans say they don’t feel prepared to handle surprise bills.*
So, if you’re feeling financial stress, know that you’re not alone. We get that for you, and many others, a broken arm or car trouble could cause major financial setbacks. Perhaps you’ve already run through years of savings and there’s no money left to repair a broken furnace. Sudden household emergencies can be costly, especially in an economic crisis.
There is good news: You have options, like personal loans, to bridge the gaps you might have, and help reduce your anxiety. Here are some tips and ideas to get you started:
Shift your budget to survival mode
Many Americans are struggling to pay for basic household expenses. With many rent and mortgage assistance programs expiring and the cost of living increasing, bills can start piling up quickly. Even if you’re managing to pay those bills, new medication for a sick child or new shoes can be one expense too many.
You may still be working from home, or your family may still be spending a lot more time at home. This could increase utility bills such as heating, electricity, and internet access. Sticking to a budget may go beyond choosing needs versus wants. Instead, you may have to lower your basic expenses.
Shifting your budget into survival mode means calling your bill collectors, explaining your situation, and asking for a more flexible payment plan. You might make room in your budget with small changes to your basic household costs. Maybe you can reduce medical costs with generic prescriptions or saving on groceries with a supermarket loyalty card. You can also save on clothing by shopping at thrift stores. Or look to neighborhood swap sites for necessary household goods and furnishings.
Depending on your income, you may also qualify for government aid. This includes Medicaid, which offers affordable health insurance, as well as programs like SNAP benefits (grocery assistance), TANF (cash grants) and housing subsidies (rental assistance).
Find ways to earn extra income
Some extra cash could help if you’re able to take on the work. Even if your basic needs are met, a lack of savings may leave you exposed to financial emergencies such as a sudden car or home repair.
If you’re comfortable working with the public, many grocery stores, restaurants, and delivery services are hiring right now. You can also earn extra cash by becoming a gig worker. Contract work and side hustles are keeping many Americans afloat in the pandemic. You can drive for a rideshare service, do handy work through a task app, or work as a freelance writer or designer.
If you’re unable to work outside of the home, think about what you can do from home. Maybe you can sell unused clothes or furniture online. You could host a garage sale and put your earnings into a savings account. Or try turning your hobby into extra cash by tutoring, freelance writing, or selling your handmade items through an online marketplace.
Consider applying for a personal loan
You can also cover unexpected expenses by applying for a personal loan that can be used as you need it — to pay for repairs, add furniture to your home office, or pay off a credit card. A personal loan can help you cover a household emergency without dipping into your savings.
Beyond helping with unexpected expenses, personal loans could help improve your overall financial situation if you consolidate higher-rate debt. For example, medical bills can be consolidated with higher-interest debt, potentially saving hundreds, if not thousands, dollars in interest. Plus, consolidating debt can make it easier to budget for by creating one set regular monthly payment. In fact, 88% of surveyed customers told us taking out a Discover® personal loan for debt consolidation helped improve their financial future.**
Plus, simplifying your debt can help you stay on track during a tough time. With one set regular monthly payment, you can better budget and plan for paying off your debt. Discover Personal Loans lets you estimate monthly payments based on your desired loan amount, repayment term, and credit score.
This is a tough time for many Americans, but rather than losing sleep over a household emergency, look for creative ways to tackle unexpected expenses. Managing money can be stressful, but there are ways to cut your costs, keep your family afloat, and move the roadblocks off your financial journey.
Need ideas to plan better for unexpected expenses? Read More