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How to Handle a Financial Emergency

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A sudden financial emergency can catch you off guard. It could be an unexpected medical emergency, car breakdown or job loss. Whatever the reason of your financial emergency, the steps to deal with a sudden cash crunch are almost always the same. If you are in an emergency financial situation, but not sure how to smartly handle it, here are some useful tips.

Identify the root cause of the problem

Dealing with a financial emergency could be stressful. And the stress can reduce your ability to evaluate the situation logically. So the first thing you should do is to calm down and try to find out the root cause of the problem. Once you identify the cause of your financial emergency, it would be easier for you to find a permanent solution to the problem.

Get a loan

If you think the problem is temporary, you can consider getting a loan for a short term. In Singapore, you can easily get a loan from licensed money lenders. What type of loan you should take depends on your situation, how much money you need and your repayment capability. For instance, if you are a salaried professional, you can apply for a payday loan. If you need an unsecured loan with repayment tenure of around one year, consider getting a personal loan.

Prioritize expenses

When you are in a cash crunch, make every penny count. The idea is to try and save the money that you have, as much as you can. To that end, you require prioritizing your expenses. Understand the difference between ‘needs’ and ‘wants’. Cut off any unnecessary or not-so-important expenses; and spend only when it is absolutely necessary. For instance, paying your utility bills is an absolute must, but you can delay your annual trip for the time being. These simple steps can help you deal smartly with any financial emergency.