5 Steps to Take When Dealing with a Financial Emergency

It happens to the best of us. From dealing with a leaking roof to a stolen wallet or alarmingly high medical bills, financial emergencies happen more than you think. Now, instead of panicking—which doesn’t do any good—there are a few steps everyone can take to handle financial emergencies of all kinds.

Take a Breath and Evaluate the Situation

Financial emergencies can be super overwhelming and stressful. It’s important to take a moment to breathe before making any big decisions. Acting with reason and logic in any financial situation is typically one of the best things you can do—if you have a financial advisor, now is the time to contact them. However, if you’re in too tight of a financial situation to do so, you still have options. At RMLEFCU, we have several certified financial counselors available to assist you. They can provide you with several helpful tips and resources that can put you on the road to recovery.

Create a Temporary Budget

The second step in dealing with a financial emergency is to take a close look at your budget. See where you can trim expenses to free up some cash. You may need to make some tough choices, but remember that this is only temporary! Once your financial emergency is over, you can go back to your usual spending habits.

Prioritize Your Expenses

Now is not the time for luxury items or frivolous purchases. If possible, put any non-essential spending on hold until you’re back on solid ground financially. This may mean eating out less, delaying that vacation, or canceling your cable subscription. Whatever it is, cutting out unnecessary expenses will help you save money.

Contact Your Insurance Company

Most likely, for whatever issue you’re having, your insurance should be able to help you. After all, you pay for insurance for a reason!

Revisit your financial documents to confirm what insurance plans you have. Then, peruse your policies to identify the areas/situations in which you have coverage so you can avoid paying more than you have to.

Use Your Credit Cards Strategically

If you don’t have an emergency fund lined up, it may be time to use that emergency credit card you have on deck. Avoid using your credit card for unnecessary purchases or cash advances, as these will only add to your debt burden. Instead, use your credit cards to pay for your essential expenses outlined in your budget. And whenever possible, try to pay off your balance each month so you don’t accrue interest charges.

Prepare For Next Time

No one knows what the future holds, but we can all agree that being prepared for the unexpected is a smart idea. We strongly recommend saving at least six months of expenses in an emergency fund so should something like this happen again, you have a bit of cushion to rely on. In addition, we encourage you to ask an RMLEFCU representative about our “Be Prepared” guide.

The following are included in your “Be Prepared” guide:

Personal information, including you and your family’s social security numbers and blood types

Driver’s license number

Passport number

Bank account information, including checking and savings account numbers as well as information regarding your payable on death beneficiary

Insurance policy information

Loans and credit card account numbers

Emergency contacts

Utility account numbers

Legal documents, such as your will, trust information, property deeds, auto titles, marriage license, birth certificates, etc.

Our “Be Prepared” guide is designed to help you keep all your important financial and legal information in one place so you and your trusted loved ones can easily access it in case of an emergency.

RMLEFCU is Here to Help

No one ever wants to have to deal with a financial emergency. But if you find yourself in one, don’t panic. Take a deep breath and follow these tips from our team at RMLEFCU. If you have any questions or would like to speak to one of our certified financial counselors, please don’t hesitate to stop by any one of our branches or give us a call at (303) 458-6660.