For this blog post, we teamed up with Fairstone, a responsible Canadian lender with almost 100 years of lending experience.
No matter how good you are at budgeting and managing your money, unexpected expenses hit from time to time. Whether it’s an urgent home or car repair, a busted washing machine or an unexpected tax bill, expenses can turn up out of nowhere and send your finances into a tailspin if you’re not prepared.
From saving up a rainy-day fund to getting an emergency loan, here are a few steps you can take to stay in control of your finances when unexpected costs arise. Start an Emergency Fund
Also known as “saving for a rainy day,” an emergency fund is money you put aside to help see you through an unexpected financial setback, such as a job loss or unexpected home repair.
Unlike other savings that you might want to invest or put into a tax-sheltered account, it’s important that you can access your emergency fund quickly and easily. To do so, you may want to put your emergency fund in an accessible high-interest savings account rather than investments. Once you log into your Borrowell account, you’ll be able to compare the rates and terms of different savings accounts available in Canada to find one that works for you.
We recommend having enough money saved up in your emergency fund to cover three months’ worth of necessary household expenses (rent, mortgage, utilities, car payment, groceries, etc.). To determine how much you need to save, review your bank account transactions from the past three months and add up your total monthly expenses.
How do you save for a rainy-day fund? If you don’t have a lot of wiggle room in your budget, find creative ways to save.Be Mindful When Taking on Financial Obligations
With the rise of buy-now-pay-later services, it can be more tempting than ever to treat yourself while on a tight budget. You might be able to manage this debt while your finances are running smoothly, but before taking on a new debt, ask yourself: if an unexpected expense comes along, will you still be able to keep up with your payments?
If your budget is too tight to manage both an unexpected expense and your payments, you could end up with missed or late payments in the future. Not only could this lead to your debt being sent to collections, but missed (and even late) payments can be catastrophic for your credit score – not to mention the stress and anxiety that may come with accruing interest charges.
Of course, we can’t avoid all debt, such as taking out a mortgage to buy a home or financing a car, but it’s a good idea to stay away from buying luxury or non-essential items unless you can comfortably afford them. Research Side Hustles to Diversify Your Income Stream
One of the best ways to future-proof your finances is to have multiple streams of income, so you’re not reliant on just one. Not only will this mean that you’re less likely to face financial difficulties if one of your income streams takes a hit, but it also means that you’ll have a little more flexibility in your budget to deal with unexpected expenses as they arise.
We’ve compiled a list of 39 websites that let you make money from home. With side hustles ranging from proofreading to design, there’s bound to be something that matches your skills and passions. Consider an Emergency Loan
Occasionally, an emergency expense will come along that you weren’t prepared for – a flooded basement, a new roof, a broken appliance or large vet bill. No matter how financially responsible you are, it may not be feasible to cover the entire expense right away.
When you’re faced with urgent, unavoidable costs an emergency loan can be a useful financial tool. The advantage of using an emergency loan (also known as a personal loan) over a credit card or line of credit is that with an installment loan, you’ll repay the money you borrow through a fixed number of affordable payments. Credit cards, on the other hand, offer revolving credit – no fixed payments – and compounding interest. If you can’t pay your credit card balance right away the interest will start to compound, and you’ll be responsible for creating and maintaining an affordable payment schedule that doesn’t leave you with mounting interest charges.
If you’re looking for a borrowing option other than your bank, it’s a good idea to do your research and find a reputable lender before taking out a loan.
We recommend our partner, Fairstone. With almost 100 years of lending experience in Canada, Fairstone has supported millions of Canadians through financial challenges with trusted guidance and responsible loan solutions.
Getting an emergency loan from Fairstone is quick and secure. With a simple online loan process, you could have your money deposited directly into your bank account on the same day you apply – which can be a lifesaver when dealing with urgent expenses. The Bottom Line
There are some expenses you can plan for and others you can’t, but managing an emergency doesn’t have to mean disaster for your budget. A rainy-day fund or an emergency loan from a trusted lender like Fairstone can help you weather the storm when unexpected expenses arise. How to Get an Emergency Loan from Fairstone
Apply for a Fairstone loan in 3 steps:
Get a loan quote – no obligation, no impact to your credit score
Find out how much money you could qualify for in minutes
Have your money in as little as 24 hours
Get a Loan Quote from Fairstone
Completing a loan quote won’t impact your credit score and there’s no obligation to take out the loan. In addition to finding out how much money you could qualify for, you can find out what your loan payments might be.
Get a Loan Quote