Paying for Emergencies

Emergencies happen to everyone and they are almost always unexpected, which makes them difficult to plan for.  An emergency could be:

• an injury or illness
• a broken down car
• a leaky roof
• the sickness or death of a loved one
• the arrest of a family member
• the loss of a job

Emergencies nearly always require money. Even if you are making ends meet each month, an emergency expense and the related stress it causes can create problems in keeping up with your regular monthly bills.

Where can you find the money when an emergency happens?  Some people can turn to their emergency funds.  But, many people do not have an emergency fund, or may not have enough money in it to cover the emergency.

There may be other ways to help cover the expenses an emergency may create. First, it may be covered by warranty, insurance, or credit card protection.  If you have an emergency expense related to your car, home, health, job loss, or a major appliance, check to see if you have coverage to help with these costs.  If you have lost your job, you may be eligible for unemployment benefits.  But remember, these may take several weeks to receive.

You may be able to turn to family or friends to help you cover the financial costs of emergencies.  If you do, be sure to be clear about whether it is a loan or a gift of money.  If it is a loan, be ready to set up a repayment plan.  Make sure it is realistic.  Unpaid debt among family and friends can create stress or damage these relationships.

If friends or family are not in a position to help, you may have to borrow money from another source.  If you have a credit card, this could be an option.  But, remember, you will have to pay off that debt.  If the amount you have to charge is large, it may take you months or years to pay off the expense.  If possible, avoid high cost, short-term debt such as payday loans, signature loans, and car title loans.  Payment will be due within 2 to 4 weeks, and your financial situation will likely not have improved in this short time.  You may also still be dealing with the emergency.  This kind of debt will just add to your stress.

 Finally, you might qualify for assistance from the government or nonprofit organizations.  For example, you may qualify for public health benefits to cover health related expenses.  Or you may be able to get charity care from the hospital if the emergency expense involves one.  Community organizations may also be able to offer:

• Utility assistance
• Food assistance
• Legal assistance—if your emergency is related to a legal or court-related issue
• Job placement assistance
• Transportation assistance
• Childcare programs
• And more

These programs generally have eligibility requirements.  To find out what is available in your community, get some help by visiting or calling 211.

For more information on paying for financial shocks and emergencies, download this helpful guide.