How to Manage Financial Emergencies While Traveling

Every one of us has experienced those moments when we think about a purchase of something really important – a new car, a dream vacation, or the latest gadget. But spending all the money we have been saving for so long is not very appealing. The good news is that it is possible to make that big purchase without having to throw caution to the wind and risk your financial future. In this blog, we will discuss different strategies that will assist you in getting what you want without necessarily spending your money.

What role does a financial plan play in managing big expenses? A financial plan is your guide to the financial future that you want to achieve. It covers your earnings, spending, savings plans, and investment plans. In the case of large expenditures, a financial plan is indeed a good friend. 

Also, a financial plan assists one in determining the feasibility of a large expense. Through the evaluation of the income, expenditure, and savings ratio, you can be in a position to know whether you can afford to purchase without straining your financial muscles or using your emergency money. By this, you will not have to resort to any loan for shopping or other expenses.

Another way of making a big purchase without having to cut down on your current savings is to develop a new savings plan for the particular purchase.

Let's understand what strategies help save up for large expenses gradually.

• Set clear and achievable savings goals. Be very specific about how much you need and by when. This clarity will assist you in staying focused and monitoring your progress. 

• Create a dedicated savings account: It is advisable to open a new account only for the big purchase. This separation ensures that you cannot use these funds for other expenses that may arise throughout the year. 

• Budget and prioritize expenses: Review your current expenses and identify which you can eliminate. Use these funds towards your savings goal.

Extra income enables you to continue saving your normal amount of money and, at the same time, achieve your goal. Here's how can you use extra income to cover big purchases:

• Create a side hustle or freelance: Employ your skills to get another source of income by doing a side job or working as a freelancer. 

• Sell unused items: Clean your environment and donate things you no longer use online or organize a garage sale. 

• Rent out assets: If you have a spare room, parking space or even a car you do not frequently use, you can consider renting them out for extra cash.  

• Utilize bonuses or tax refunds: Do not spend or save these windfalls in your normal savings account, but put them in the big purchase account.

Regarding financing, saving is the most recommended method, but there are cases when other methods can be useful. However, it's crucial to approach these options with caution: 

• Personal loans: These can have lower interest rates than credit cards, but always read the small print and ensure that you can afford the repayments. 

• Instant short-term loans: These can give quick access to funds, but they attract high interest rates and fees. Use these only when there is no other option, and only then make the decision. 

• Responsible borrowing: If you have to take an instant short term loan, take only that which is necessary and ensure that you have a plan on how to repay the loan. 

Conclusion

It is possible to make a big purchase without cutting down your savings if you know how to do it. By now you must have understood what role does a financial plan play in managing big expenses. Just bear in mind that it is important to plan, be disciplined and be patient. It took time to build Rome, and it also took time to save big money. If you are still unable to overcome it, mPokket provides a personal loan in Delhi to cover unexpected expenses.  

Whether it is that new car, dream vacation, or the latest gadget, following these strategies will put you on the right track to enjoying your big purchase without any remorse because your financial future is secure.