Ever had to take the car in to the mechanic only to find out what you thought was a little problem is in fact a major repair?
Or come home to find the washing machine has had a nervous breakdown and flooded half the house? Perhaps, someone in the family had to take an ambulance or racked up some other huge medical bill unexpectedly.
Unfortunately, these dramas can happen to any of us, at any time, and as with anything unexpected, you may not be prepared, have insurance, savings or even a good credit rating to help out.
It’s HOW much? Is your first thought followed quickly by panic and your next thought, ‘what am I going to do?’ The best thing to do when you get unexpected big expenses is try not to panic and look at all your options.
1. Negotiate and/or juggle things
Try negotiating on price and payment terms or seeking a payment extension in the case of an expected utility bill.
You can access assistance from a financial counsellor at welfare agencies such as The Salvation Army, St. Vinnie’s, local churches or The Red Cross. If you’re not sure where to go in your local area, Centrelink can help you find a welfare agency in your area and may be able to refer you to them. The assistance to be provided is up to the individual welfare agents and may or may not be available, but is an option definitely worth investigating.
Some provide assistance with small loans for white goods, or can provide financial counselling to help you negotiate a realistic payment plan with the supplier. You may be able to get a food voucher or hamper and re-direct grocery funds to help free up some of your regular budget.
2. Apply for finance
Many vets, for example, have finance options available to pre-approved customers in the event that something major happens to your family pet. You could also consider applying for a short term loan or credit card limit extension but all these options require not only a good credit rating but also the ability to repay the debt.
Short term loans, in particular, often attract very high interest rates and mean you end up paying more than triple back to the credit provider. Credit cards can put you in the same boat if you can’t afford more than the minimum repayment amount each month.
Another ‘loan’ option to consider is utilising an advance payment from Centrelink if you receive either a payment or family tax benefit from them. The advance payments loan you a percentage of your fortnightly allowance and are paid back in instalments – without interest – each fortnight.
They are subject to you not having a debt with Centrelink, and meeting the eligibility criteria for the advance payments which includes how long you have been receiving a payment, the amount of payment you receive each fortnight and if you can afford the repayments.
You will likely be offered a welfare referral if you do not meet the criteria. The amount available depends on your individual circumstances and whether you have one outstanding already. Many people don’t know that you can repay a family tax benefit advance early to take it out again sooner. If you only owe a small amount, it may work in your favour to pay it back in full and draw the full advance again.
3. Be insured
Check your insurance cover, if you have it. Some house and contents insurance covers items taken from your car and these days there is insurance for pets and all. It’s worth checking your policy or shopping around and reading the fine print next time it’s up for renewal.
If all else fails, you could always try giving your family a call to see if they can help!