"Assess your situation to find ways to close the budget gap."
1. Assess your savings -
If your emergency savings won’t cover the expense, take a close look at your other savings. If you have money set aside in a savings or money market account, this may be the time to tap those funds. However, if your money is tied up time deposit, retirement account, insurance or investment, there may be penalties for withdrawing those funds.
2. Revisit your budget -
Being hit with an unexpected expense can offer a good opportunity to take a closer look at your budget. Categorize your expenses into needs and wants, and find ways to reduce your unnecessary expenses. Although it may be tough to cut back, look for items you can give up for the short term or something you can cut to make up part of the shortfall.
3. Look to your available credit -
Figure out how much credit you have and the total amount that is available. If you still find that you’re coming up short, consider asking your lender to increase your credit limit.
Using a combination of these strategies, you may be able to get your budget back on track. If you still find yourself strapped for cash, there are other emergency funding options you can consider.
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