Picture this scenario; you’ve just come home after a weekend break and your work week is just about to start. A pipe has burst and there’s flooding in your basement, and it’s also shut off the supply to your bathroom and toilets. You need an emergency repair service from a local plumber, but it’s going to cost a lot of money and your insurance company can’t help you. In this situation, you’re going to have to fork out some money in order to fix the problem as quickly and efficiently as possible.
But what if you don’t have the emergency savings for it? What if you’ve just spent everything on a weekend break with your family?
To prevent this situation from ever happening, it’s a good idea to prepare some kind of financial backup for rainy days like this. Even if you do have the savings to cope with these situations, you’ll still want to quickly rebuild your emergency funds so that you don’t get caught off guard by a similar emergency in the near future. So to help you out, here are a couple of ideas for financial backups that you should prepare.
Having a secondary source of income
One of the best ways to prevent a financial emergency is to have a secondary source of income. You could earn money online, you could have a second job, or you could set up some kind of business. These are fantastic options for securing a second source of income and they’re generally the best way for you to cope with financial emergencies in the future. While it can take some time and investment to secure a secondary source of income, it’s often the best way to prepare a financial backup.
In most cases, having some kind of passive income is the best option here as it’ll help you build up an emergency fund. There are some business ideas that take very little effort once you’ve established them, such as an eCommerce business. You could also consider renting out your car or property whenever they’re not in use. In short, try to establish another form of income and you’ll find it much easier to cope with financial problems.
Making the most of your belongings
There are a number of ways to make use of your belongings to help you prepare for a financial emergency.
One of the best ways to secure a large amount of funding is to consider loans. In particular, loans that are secured against your belongings. For example, you could search for a premier diamond-secured lender that will offer you a loan that is secured against any diamonds that you own. There are also similar options for different kinds of jewelry. This is a fantastic option for anyone that knows that they can repay the loan quickly but would prefer not to take out an unsecured loan. You may be able to get better rates if you secure the loan against something that you own.
Alternatively, you could also sell some of your clutter or belongings to make a bit of extra money. For instance, you could own some unneeded electronics that are still worth money, or you could have collectable items such as trading cards, comics, and video games that are worth a lot. Selling these items is a great way to help you pay for emergency expenses.
Lastly, you could just get rid of your clutter if you find that your home is full of random items. For example, some companies will pay you for bulk clothes in bags. It’s a convenient and easy way to get rid of some of your belongings, and it’s also a great way to organize your home while making some extra money.
Saving money in specific spots around your home
While it’s a rather old and traditional way of saving money, it’s still completely valid to try and save money around your home in inconspicuous spots. For example, some people might try and hide money in their shoes, under the mattress, inside a tennis ball, or under a plant pot. There are a number of different options here, and they’re all valid ways to help you hide money around the home that you could use for emergency situations.
Another great reason for doing this is to protect your savings against burglaries without having to rely on your bank. If you prefer to hold on to your cash, then you should think of different ways to store the money while still protecting it against potential thieves. The last thing you want is to find out that your home was broken into over the weekend when you were away and realize that they broke into your safe which contained all of your savings.
While we would always suggest having your savings in a secure account, there are some people that would generally prefer to have their money in cash near them at all times. If this is the case for you, then it’s a good idea to try and store your money in hidden places to make it harder for thieves to steal from you.
This is also a consideration for jewelry and other similar items that are worth a lot of money. By hiding your jewelry in unexpected places, you could use it in a financial emergency in the future by pawning it off or just selling it on a marketplace. If you keep these high-value items in plain sight, then you’re asking for them to eventually be stolen!
Preparing a financial backup is all about investing your money into things that could potentially give you a bigger return in the future. Whether it’s buying collectable items, keeping your jewelry safe, or even starting your own business for a secondary source of income, these are all completely valid ways to protect yourself against financial emergencies that could appear when you least expect them to.