Unexpected emergencies are business as usual for homeowners. You might turn on the faucet only to realize you have no hot water for your morning shower. The heater blew in the night, and now you have a $500 repair bill to worry about.
Although repairs are a normal part of household upkeep, it’s not always obvious how you’ll afford essential maintenance when it comes out of the blue. Keep scrolling to make sure you’re financing this repair in a way that protects your finances.
An Emergency Fund is Always the Best Route
An emergency fund should be every family’s Plan A. Knowing you have these savings makes handling a minor household repair easy.
But you’ve raised your family for long enough to realize that Plan A isn’t always available. That’s why having a backup plan can come in handy.If you don’t have enough savings to afford your unexpected emergency repair, an online line of credit just might be your Plan B.
Shop Around for the Best Rates and Terms
Before opening a line of credit, you must spend a little bit of time comparing your options.
You may not feel as though you have that time to spare. After all, this is an emergency, and your house is on the line! But trust the process. This research can help you find the best rates for your needs, which helps you save money in the long run.
Shopping online can be tricky in a way in-person comparison shopping isn’t. You can scour the world wide web for online lines of credit, but you won’t be able to apply for all of them because of your location. Lending regulations make it impossible for financial institutions to extend credit if they aren’t accredited in your state.
All this means is you should specify where you live when shopping for rates. For example, if you live in Memphis, make sure you compare online loans, although online loans in Tennessee may be specific enough.
Draw up a Budget
Finding an online line of credit you qualify for is good, but making sure it’s affordable is even better. Once you have a good idea of how much it will cost to put your repair on this account, factor its payments into your budget, says Mommy Melee. You’ll want to include any interest and finance charges to ensure an accurate number. You should only lock into something you can successfully juggle with other bills.
Make More Than the Minimum Payment
Once you’ve made your repairs, you’ll receive a billing statement. This bill shows your outstanding balance and minimum payment.
Although the minimum payment is the lowest amount you can pay to keep your account in good standing, you should aim to pay your balance in full. You can attack debt more effectively by making more than the minimum, so you may free up your limit faster, says Money Market.
This might come in handy if another repair comes your way; you can withdraw up to your limit again to help in an emergency.
Remember the tips you learned here today if a small household repair is on a collision course with your budget. They can help you minimize an unexpected repair’s impact on your family’s finances.