How To Meet Unexpected Expenses When You Are Unemployed

Business is flat, you failed to achieve your target and messed up, or your contract length is over. There could be a myriad of reasons why your employer asks you to get the papers. As soon as you are redundant, you find yourself on the hook.

You have a long list of expenses keen on burning a hole in your wallet, and you do not have a steady flow of cash coming in, and amid all of that, when you try to work on your budget, you see unexpected expenditure begins to chase you, another turn of a screw.

Unplanned expenses can turn up at any time, and they do not see if you are really up for them. You can ace out of it when your savings have enough room to meet all these expenses. Unfortunately, your luck cannot be always on your side. Many jobless people struggle to get by, and if you are one of them, do not assume that this is the end of the world.

You can brace yourself to meet unplanned expenses when you are out of work, but the first thing you need to do is to apply for unemployment benefits. Visit the official website to check the eligibility criteria and the application procedure. Unemployment benefits will help you stay afloat in tough times.

Here is how you can meet unexpected expenses when you have no work at all:

• Emergency fund

Emergency funds can come in handy when unplanned expenses catch you off the wrong foot. It is likely that you had them, but you have already exhausted them, or you will likely back and fill them as you may have created them for other expenses.

Well, know that emergency funds are built to cushion the blow to your finances when you are out of work. As far as the subject is savings for a wedding, car or mortgage down payment, you cannot add them to emergency funds.

You are all wet if you are not using emergency funds in that you will use them for upcoming planned expenses. In order to avoid interest on loans, dip into your emergency cushion. The odds are your savings are not enough, but instead of turning to direct lenders, you should pull money from long-term savings. You can fill the gap after getting a job.

• Loans for unemployed

Chances are you do not have savings at all, or your savings are not sufficient. You have no other way than to borrow money from direct lenders. As you know that no lender is permitted to lend money without an income source, unemployment benefits will be considered your income.

Securing emergency loans for the unemployed in the UK based on unemployment benefits is not so easy because you must be able to have some money left after meeting all your regular expenses to pay off the debt. Try to have a part-time job like walking dogs or babysitting to earn some money.

Some lenders may sign off on it, but be careful. If you fail to repay the debt, you will face the consequences in the end, not your lender. You cannot completely hinge on your lender’s approach to determine your affordability. Check if you can actually pay off the debt by using an online loan calculator.

The loan could be a suitable option only when you know you can repay it and use it for emergencies that cannot be put off.

• Family and friends

You can take help from your family as well when you are unemployed. In fact, this is the best alternative. You can avoid paying interest. Your parents will be more than happy to offer you help in your need for an hour. However, this is possible only when they have extra cash.

You can turn to your friends too. They might support you when you do not need a lot of money but promise that you will pay them back. At the time of borrowing money from your family and friends, keep in mind that you will have to return the money.

Discuss your financial situation with them and then finalise the time when you will be able actually to pay back the money. If your friends want interest to be paid, you cannot deny it. Evaluate everything before you agree upon any terms of the contract.

Do not break your promise because this will put a strain on your relationship, and if there is a written agreement bearing your signatures, you can be taken to court.

• Quick cash loans

You cannot apply for these loans if you are simply living off unemployment benefits. However, if you have a part-time job or freelancing, you can use that income to apply for quick cash loans. These loans will help fund your emergencies unless you get your new job.

Quick cash loans for bad credit are very convenient to apply for. They can be processed faster than unemployed loans, and you can borrow a higher sum than unemployed loans. While unemployed loans are capped at £500, quick cash loans can be up to £1,000.

Just because these loans are convenient to apply for, it does not mean that you will rush to these loans when you need money. You should rather analyse your repaying capacity. Ask yourself if you actually need money.

The final word

When you have been laid off, you may need an instant injection of cash to meet unplanned expenses. Of course, you will turn to your savings, but that might not be sufficient. You would likely take help from direct lenders.

You can consider applying for loans for the unemployed. If you have a part-time job, you can prefer applying for quick loans as well. If you have an emergency cushion, you should use it first. Give priority to your friends and family when you are in need of some money before borrowing from direct lenders.