Protect yourself from emergency expenses with these 4 tips

Published on June 17th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Emergency expenses protection tips

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Being able to stay on top of your budget is a goal that many of us wish to achieve. However, when emergency expenses pop up all hell can break lose and down goes the budget. There are ways in which you can protect yourself from those emergency expenses. Here are five handy tips to get you started.

1. Create an emergency fund

Creating an emergency savings fund may be an afterthought for many Australians that are faced with tight budgets, but it is something that can be considered. A survey by BT financial group found that 1 in 5 Aussies have no savings to fall back on. Constantly re-evaluating your budget can show you which areas you can cut down on or how to maximise your money in various areas. The key is to put aside what you can realistically afford, which goes hand in hand with setting a realistic budget. Discussing budget cut backs with your partner can also make your goal for opening and maintaining an emergency fund possible.

2. Keep track of your expenses and debt

Setting up a budget is winning half the battle. Keeping track on how you spend your money, your expenses, and ensuring that your debt is paid off is another essential key. This can help you stick to your goal of maintaining an emergency fund without creating more financial problems. Start off by paying off the small amounts of debt and slowly work your way to paying off the bigger ones. This can help to make the process less intimidating. This can also paint a realistic picture of how much you can put aside.

3. Consider taking out a personal loan

Unfortunately, there are situations that are beyond your control that may require lump sums of money. This can leave a hole in anyone’s budget and could possibly lead to a debt spiral. Taking out an emergency personal loan that is specifically created to take care of such scenarios is something that you can consider. However, it is vital that you check that it comes with features and terms that are suitable for your financial circumstances. Speaking to a financial advisor or a broker can help you make an informed decision on whether a personal loan will work for you.

4. Could your credit card get you in trouble?

The type of credit card that you have can either be a blessing or a bane to your existence. According ASIC, Australians owe $45 billion in credit card debt. One of the reasons that Australians fall into credit card debt is because of owning the wrong card. Having the wrong card can mess up your budget and can lead to emergency expenses popping up. It is vital to check if the credit card you own comes with the best possible rate and features that work for your circumstances. If not, it is time to consider a swop to a card that does more for you.

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