10 Ways to Prevent an Emergency From Driving You Into Debt By Nicholas Christou  Emergencies can happen! They can often be expensive — particularly car accidents; unexpected dental or medical needs; high vet bills;  unexpected flooding in your apartment after a vicious storm; not to mention the worst of them all… accidents that effect you directly.  If you have not fully built up your emergency fund yet (or you are hit with back-to-back hardships that your emergency fund can't handle), then you can feel like you have no choice but to go into debt to pay for your emergency. However, nothing could be further from the truth. There are much better ways to take care of emergencies without going into debt. Here are some ways to assist in getting you through an emergency situation: 1. Ask Family for help Asking for financial help can be a serious relationship killer, which is why many people would prefer to do anything (including go into debt) rather than ask a family member for money (or to a lesser extent, ask a friend). But the real problem with getting financial help from a family member is when there are unmet expectations. For instance, they may put short deadlines on when they want it paid back, even ask for the original amount plus interest in return.  However, typically the usual outcome is you will probably end up resenting this person if they say no. So, you need to go into the conversation with the understanding that they can say no and that it does not reflect in any way on your relationship if they do. 2. Ask Your Bank for an Emergency Bank Overdraft If your emergency occurs within a few days of payday, it could be worth your while to talk to your bank about an emergency bank overdraft. Explain the situation that you are in and tell the bank how much of an overdraft you will need. Be sure to ask how much the fee will be, to cover your overdraft. From there, your bank can either approve or deny your request. Depending on the cost of your overdraft protection, this could be a relatively inexpensive way to get the money you need. 3. Sell Something In an emergency, it becomes clear that some of the stuff you own may be less important than you think. That's a good time to sell some of the things you have kept but no longer need. If you have some time, you can try to sell your things on Gumtree or eBay. My wife recently cleared out her closet, and elected to sell it all at a local market stall. What was left she gave to charity. 4. Access your Superannuation While it's generally a bad idea to borrow from your future (Superannuation) to pay for a current need, you may however have a case to access your Superannuation under ‘Financial Hardship’.  This is not ideal nor is it straight forward to do however; you may have strong reason to put forward this request. It would be best first to seek financial advice to ascertain whether you have a strong case to make a financial hardship claim, but also to see if there are alternative strategies you could take to improve your financial position, apart from accessing your retirement fund in the first instant. Like checking to see if you have an income protection policy inside your Superannuation. This is beneficial as not only will it pay 75% of your income upon successful claim, but also the premiums could be offset by your employer contributions.  5. Research Alternatives to Your Emergency Depending on what major expense has unexpectedly cropped up, you may be able to reduce the expense to something more manageable if you do a little shopping around. For instance, emergency dental work does not necessarily have to break the bank. Dental schools are in constant need of patients for students to practice on. A friend of mine who went through dental school had a great deal of trouble finding patients for each type of procedure she needed to complete for her degree, and even began offering token amounts of money to patients in order to get them to come in for needed procedures. Call your local university to see if they are in need of dental patients — or veterinary patients if it's your cat or dog that is having the emergency. In addition, Tafe and other technical schools need practice in diagnosing engine problems in cars. Your problem could be good experience for a budding professional, while having a student fix it could cost you a lot less. 6. Get assistance from your Income Protection policy or check if your superannuation fund has it in place for you. It is when unforeseen events occur like an accident or illness to oneself, having income protection is key (as we previously mentioned).  It is when the unexpected happens you find yourself looking for ways to continue paying your debts- your mortgage, personal loan, credit card, etc; as we know your expenses/loans don’t stop just because now you’re off work . Having Income Protection in place in times of need is when the true value of this insurance comes to fruition- as upon successful claim it will pay a minimum of 75% of your current wage. Contact your Superannuation Fund provider and ask the question do I have any form of insurances in place that can help me in my current situation. Such a policy can assist by replacing your salary if you are ill or injured and unable to work.  7. Cut Way Back How much do you spend each month on food, power, gas, and mobile phone? You may be able to find enough money in your monthly budget to cover your emergency if you are willing to eat less take away food, turn off the Air Conditioning, take the bus, and switch off your mobile phone data plan for a month. This may sound drastic, but it's preferable to getting into debt just to avoid a few weeks of discomfort. 8. Save in other areas of your lifestyle By simply increasing your excess on your home/contents/car insurance policies you can save money throughout the year. An example of this is, I am yet to make a claim on my car insurance policy. Why pay the standard excess when I have no history of car claims? So I pay a higher excess and hence reduce my annual premium. Life Happens So, to avoid being left dry in case of an emergency, there are measures you can take to properly prepare you for the unforeseen occurring- like having put aside emergency funds and/or having the appropriate personal insurance in place.   To best see how you would stand if some form of emergency happened to you, speak to a Financial Adviser/Planner who will be able to review your current financial position, and offer you guidance on how you could properly protect yourself and your family financially. Author: Nicholas Christou To contact the author please click here