Emergencies That Feel Like an Emergency, but Aren’t

The worst mistake that quite a lot of people make these days is to confuse a situation as an emergency, when it actually isn’t one. What follows is that people tend to use their set-aside emergency funds for such so called “emergencies”. It is extremely important to realise if a situation actually classifies as an emergency to make the right use of funds you set aside for it. Following are a few majorly false financial emergencies you are likely to get confused about.

Home Renovations

Although you might have guests coming over from abroad, and you want to make sure your place looks spic and span, it is not enough of a reason to tap into your investments. This is a common mistake people make, leaving them barehanded when an actual emergency strikes. If you want to renovate your place, cut back on some routine expenses and use the savings from them for this purpose.

Travelling

You should always be able to distinguish between an opportunity and an emergency. A good deal on a resort in Hawaii or a cheap ticket to Tahiti Islands is surely a good travel-opportunity, but not by any means, an emergency. While you may surely make the most of this opportunity, using your emergency funds for it is far from an option.

Expensive Gifts

Giving a gift to someone is a nice gesture, but you must not get carried away with it. Instead of gifting an expensive gadget that requires you to withdraw money from the funds, you should opt for something that is a little more in-budget for you.

When Should I Use My Emergency Funds?

The key purpose of setting up an emergency fund is to use it when an unexpected financial emergency knocks on your door. According to a research, the major financial emergencies include paying unexpected medical bills, major life events, releasing a debt-mountain, job-loss, legal costs, and funeral costs etc. Using your invested funds is a wise idea if your expenses are along the same lines. Several other experts also allow the usage of your emergency fund money to pay insurance premiums, car payments, childcare costs, or home-repairs in case of a natural disaster.

How to Deal with Non-Emergency Situations?

The best way to deal with such situations is to first estimate the amount of money a particular non-emergency irregular expense cost you the previous year. Then divide that annual amount into monthly costs and set a percentage of your monthly income to cater to those costs. This will allow you to address both types of expenses in a more manageable manner, and consequently cushion your financial needs throughout the year. To distinguish between the different emergencies, classify them in four sections:
  • Urgent–Important: You should tap into your emergency funds for them.
  • Not urgent–Important: Set emergency funds to cater to these.
  • Urgent–Not important: Use you non-emergency funds for them.
  • Not urgent–Not important: It is better to avoid such expenses.
Following these guidelines will help you live a happier and financially stable life.…

Is It Possible to Secure a Payday Loan?

Payday Loans have become one of the most popular forms of financial assistance in the UK. These loans are short-term consumer loans that allow people to borrow money up to £500 and repay it within a few days.

Payday loans, also known as short term or small money loans are typically obtained when a person is going through financial stress that requires immediate resolve. Many people consider payday loans as an ideal financial solution for short term needs. However, it is worth noting that while payday loans can be helpful, they are not always the best financial instrument in some cases. Payday loans are generally repaid in a short period of time, or until the borrower’s next pay check. One thing that many people forget to consider when looking for payday loans is the associated costs and fee with this lending instrument. Here we will discuss whether or not payday loans are ideal financial solutions and what the reasons for which they should be obtained are.

Qualification Required

In order to qualify for a payday loan, you need to provide lenders with your current home address, have bank account under your name, and be 18 or older to meet the legal qualification of obtaining a payload. Make sure your bank account allows the direct debits option. Doing so allows the lender to take money out of your account to make loan repayments.

Credit Score is Important

Your credit score does play an important role in the approval of the payday loan. Generally, people have average to good credit score will be able to quickly acquire payday loans. Lenders will ask for details that may include:
  • Identity
  • Copy of current and past pay check
  • Bank statement
  • Credit score
By providing a copy of your current pay check you allow the lender to know that you can afford to repay the loan and will match the amount you want to borrow. However if your current pay check does not match the funds that you want to borrow then you will have to settle with an inferior amount along with higher interest rates.

Estimate the Amount of Money you Need

You need to understand how much money you need to borrow first. To figure out the amount, refer to your income and current expenses. Add the interest rates to the amount to see how much you will need to repay the lender. Enter the amount you need to borrow, fill out your personal details, and provide your address and employment information. Accept the lender’s terms and conditions and submit your application.  

If you want to borrow money for a short-term use, use payday loans. If you need a loan for long-term use, take out a loan from your bank.