No matter how carefully you budget and plan, unexpected expenses are an unavoidable part of life. A car repair, medical bill, or home maintenance issue can throw your finances into turmoil if you’re not prepared. When these surprise costs pop up, it’s important to act quickly and make smart choices about how to cover the expense.
Ask about payment plans
Before putting the whole expense on a credit card, ask if the provider offers a payment plan. Many hospitals, repair shops, contractors, and other businesses will let you pay off a large bill over several months with little or no interest charged. Taking advantage of these plans can save you from high credit card interest rates.
Request an extension
If you simply can’t pay the bill right away, politely ask for more time before any payments are due. Most credible providers will be understanding if you explain your situation and are willing to pay something toward the bill as a show of good faith.
You can use free scripts, online dispute letter templates, and cost-of-living calculators to bolster your case. Seek form letters specific to cable bills, hospital bills, credit card statements, phone bills, etc. to save time and effort.
Check if you qualify for financial assistance
Depending on your income level, many hospitals and clinics have financial aid programs that could partially or completely forgive major medical expenses. Other assistance programs from government agencies and non-profits may be able to help with utilities, housing costs, or other bills in an emergency situation.
Consider a credit card—but read the fine print
If you absolutely must pay for the expense using credit, know what you’re signing up for. Cash advances often have higher fees, while regular purchases may qualify for a low introductory interest rate. Going with a card from your bank or credit union could get you better terms than a retail card. Just have a plan for paying it off as quickly as possible.
Trim other expenses
To free up money for an unexpected bill, look for areas where you can temporarily cut costs. Reduce unconscious spending, cancel subscriptions and memberships, and avoid any discretionary purchases until the emergency expense is paid off. Use a trusty budgeting app or spreadsheet to get a handle on your expenses.
Use your emergency fund
An emergency fund is the ideal way to cover a surprise expense without going into debt or making difficult spending tradeoffs elsewhere. If you don’t have one yet, now is the time to start building some cash reserves for the next inevitable rainy day.
Staying calm and having a plan for managing irregular large expenses can make these stressful situations much easier to get through. A little creativity and prioritization goes a long way when you need to come up with money on short notice.
