When Hiccups Turn Into Emergencies
We have all experienced hiccups before, and we all have our own ways of coping with them. You can laugh them off, get a fright or hold your breath until they pass, as generally one of these three methods usually fix the issue. But can we use these same tactics for when we experience financial hiccups too?
Cry, Laugh, Hold
We can laugh at the fact that our phone suddenly died on us and now we need to buy a new one quickly. We can get a bit of a fright when we realise our car registration and WOF are due in a few days, so we make the correct actions to pay these bills on time. And we can hold our breath because we need to pay rent before the weekend meaning we can’t afford to go eat out or go do activities until our next fortnightly pay comes in on Monday. These small hiccups can be dealt with by using those three strategies above, and we probably all have been in one of those situations before. But what do we do when all three happen at once? What happens if you have just paid rent and have little to no money until next pay and then suddenly your phone gives up on you and you remember your car expenses are due? This is a genuine situation that ordinary kiwis can go through, we know this, as this happened to one of the employees in the office last week. The poor guy’s phone died, he hadn’t paid his rent yet, and he just paid his WOF for his car and then got reminded that he had his car registration due too.
They Add Up
Having multiple hiccups occur at once can turn your unfortunate luck into an actual emergency. All payments combined could be upwards of $800, which is quite an inconvenient amount for anyone. The employee has a savings account but didn’t want to touch it since he gets bonus interest from keeping his hands off it, but he doesn’t have enough on him in his everyday account to cover these expenses either. Stuck between a rock and a hard place, and with no other option, the poor guy turned to his emergency account that he had put away for situations just like this. An account with which he chucked $1,000 into near the beginning of the year, the staff member was able to cover his expenses and get by without a worry. Yes, it was hard for him to part with that money, but it meant he didn’t have to go apply for any payday loans and get himself into a vicious debt cycle. Having a simple emergency fund meant he was prepared for the mishaps that decided to hit him all at once. Mishaps just like these can hit unexpectedly and at any time. You may have just gotten back from holiday, had bought school uniforms and just paid your insurance, to then get hit with an unexpected hospital visit that put you out of work for a month. Hiccups can turn into emergencies, so we need to be prepared for the unexpected.
Get yourself an emergency account and don’t touch it until you need it. Keep it there ready with at least a couple weeks’ pays in there to help cover any unexpected expenses that come your way. Stay financially resilient and be prepared. You may be able to hold your breath until the hiccups pass, but you might pass out trying to do it for an emergency.
For more information on how to prepare for emergencies and emergency funds, check out the following: