If you’re like many financially conscious individuals, you understand that creating a monthly budget can help you stay on top of your expenses. However, no matter how carefully you plan your monthly budget, unexpected bills have a way of popping up at the worst possible time. Whether it's a sudden utility bill spike, a traffic violation fine, a necessary home repair charge, an unexpected pet medical bill, or an urgent airline ticket purchase for essential travel, these surprise costs can disrupt your finances.
In such cases, if you don’t have extra cash set aside, it can feel overwhelming to figure out how to cover the expense without putting yourself in a bad financial situation. You might find yourself delaying other payments or even considering borrowing money from unreliable sources to make ends meet. Fortunately, there are practical ways to manage unexpected bills without suffering long-term financial strain. Here are some effective ways to cover an unexpected expense while keeping your finances under control.
1. Use Your Emergency Fund (If You Have One)
An emergency fund is one of the best financial tools you can have for dealing with unexpected expenses. If you’ve been setting aside money for emergencies, this is the perfect time to use it. Using your emergency funds for such situations allows you to cover any bill without resorting to borrowing money or maxing out your credit card. This means you won’t have to worry about paying interest fees or debt piling up later on.
2. Consider Taking Out a Credit Card Cash Advance
If you don’t have enough savings to cover your unexpected bill, taking out a credit card cash advance may be a viable solution. A cash advance allows you to withdraw cash from your credit card, similar to using a debit card at an ATM. In the case of Maya’s Landers Cashback Everywhere Credit Card, you can get a cash advance by withdrawing at any Visa-supported ATM using the card.
Before taking out a cash advance, however, make sure to check the cash advance limit of your credit card. Most banks don’t allow you to withdraw your full credit limit in cash. Instead, they set a lower percentage of your total credit limit. To be certain, check your limit through your banking app or contact your bank to ask.
Considering that cash advances accrue interest immediately, they’re best used as a short-term solution. It’s also advisable to repay the borrowed amount as soon as possible to avoid accumulating high-interest charges.
3. Use Your Credit Card for Immediate Expenses
You can also use your credit card to cover your other regular expenses—like groceries, dining, utility payments, and other recurring obligations—if your unexpected bill requires immediate payment. This frees up the cash you originally budgeted for those essentials, allowing you to redirect it toward the urgent bill instead.
However, it’s crucial to use your credit card wisely. While it can be a helpful tool, it’s best to use it only for expenses that you know you can pay after the grace period. Avoid maxing out your card or making unnecessary purchases, and make sure to pay off the balance as soon as your statement is available to prevent interest from accumulating.
If possible, use a card with low interest rates or rewards that can offset some of your expenses. For example, the Landers Cashback Everywhere Credit Card gives you up to 5% cashback at Landers, 2% on dining spends, and 1% on all other qualified transactions*.Once you earn enough points, they can be converted into cashback vouchers that you can use at any Landers Superstore nationwide. This further stretches your budget while making sure your immediate expenses are covered.
4. Look for Quick Income Opportunities
Another option you can consider is to find a quick source of extra income to help you cover unexpected expenses without disrupting your current finances. There are many ways to earn additional cash quickly, depending on your skills and available time.
Freelancing is one option. From providing virtual assistance or tutoring services to doing graphic design or web development work on the side there are different opportunities you can consider. If you have items you no longer use, selling pre-loved clothes, gadgets, or accessories in online marketplaces can also bring in quick cash. Keep in mind that even small earnings can help cover part of the unexpected expense without putting too much strain on your budget.
5. Borrow Responsibly If Necessary
If there’s no other way to cover the expense, taking out a personal loan might be an option. Traditional and digital banks in the Philippines offer personal loans with varying interest rates and repayment terms. As a Bangko Sentral ng Pilipinas-regulated financial institution Maya, for example, provides loan options with fast approval processes and flexible repayment plans, making them convenient for urgent financial needs.
However, it’s important to borrow only what you can afford to repay. Also, compare different lenders, check the interest rates, and read the fine print before applying for a loan. More importantly, avoid informal lenders like "5-6" loan sharks and illegal online lenders, as they often charge excessive interest rates that can trap you in a cycle of debt.
6. Cut Back on Non-Essential Expenses
Lastly, adjusting your spending habits can help you free up cash to cover the cost of any unexpected bill. Identify non-essential expenses that you can temporarily cut back on, like online shopping, entertainment or streaming subscriptions, or other discretionary spending. If you have multiple streaming subscriptions, for example, consider maintaining just one in the meantime and pausing all the others. Such small sacrifices can add up and give you room to have extra funds without dipping into your savings.
Having unexpected bills to pay can be stressful, but it doesn’t have to derail your entire budget. With the right financial strategy, you can manage the situation without suffering too much financially. The key is to stay calm, assess your options carefully, and take pragmatic and responsible financial steps to address the extra expenses you need to cover.
*Transactions that don’t qualify include: cash in, cash advance, quasi cash purchases, casinos and gambling, fuel, supermarket, pharmaceuticals, utilities, telco, and government.
