If you’re reading this article then you probably need to heed this reminder: You built up your emergency fund to help you only in the event of an emergency, so unless you’ve exhausted all other options, dipping into this account should not be your go-to solution. Instead, consider the below alternatives when you’re in need of short-term financial relief.
1. Look At All Your Lending Options
Falling into debt is a serious concern when it comes to borrowing money, especially when you’re already facing financial difficulties. High-interest credit cards and payday loan schemes are considered predatory lenders, so skip these and anything else that sounds too good to be true. Your safest loan option is to borrow only what you need from someone you trust, like a partner, relative, or friend. If this isn’t possible, fast small loans from a reliable, not-for-profit lender may be worth considering. These lenders are known for their transparency and may even offer complimentary financial advice.
2. Using Returns, Rebates, and Refunds
Don’t panic right away if you are unable to secure a loan (or a big enough loan for your needs). Take a moment to consider what point you’re at in the financial year or if you have any refund entitlements you can put to use. If you (or your partner) have recently submitted your tax returns, perhaps using your tax-back can be a better solution as opposed to spending your emergency fund, especially if you usually allocate this money to general spending or savings anyway.
If you have made any recent large purchases that are non-essential, you could also consider returning them for the cash you need now, and buying at a later time. Returns regulations and policies may vary depending on retailers, so make sure to check your receipts and the store policy.
3. Extending Your Due Date and Flexible Payment Terms
Have you checked to see if you can delay or extend the due date of your upcoming bills or important payment? Many people feel so overwhelmed with the thought of not being able to make a payment on time that they don’t even consider the possibility of their biller providing some leniency. The reality is, billers, insurance companies, health care providers, and other services often offer flexibility with payment terms, provided that they are paid eventually.
Get in contact and make an urgent inquiry. You may be granted an extension or payment plan which can be much more affordable and provide you with the time you need to sort out your finances.
4. Government Support
It is unfortunate that some people allow feelings of stigma towards seeking government support to get in the way of realizing that there may be programs available to help their specific circumstances. As a citizen and/or tax-paying resident, you may be eligible for certain benefits to assist you in times of need with things like housing, healthcare, unemployment support, financial aid for students, and bill help. Take a look online at government benefits, grants, and loans to learn more. Remember that your taxes go towards these programs to better the society you live in, so there is no shame in seeking help.
Take a deep breath and remember you are not alone as you go through each of the above steps. Support is here for you when you need it, and if you find that these alternatives are not enough, then you can safely access your savings knowing you exhausted all other viable options.