In an ideal world, every one of us would have at least six months of living expenses in an emergency fund to cover our rent or mortgage, food, and other necessary expenses until the emergency is over.
In reality, even when we do save for a rainy day, sometimes the deluge is so strong it can overwhelm us. As emergency expenses drain our savings, we may find ourselves devastated and wondering how we can possibly recover.
Fortunately, resources are available for individuals and families who need emergency financial assistance. We’ve put together a list of those resources here, including free emergency fundraising on our site.
How to find help
While we Americans often pride ourselves on our bootstrapping independence, a 2011 survey found that 64% of us don’t have enough cash on hand to handle so much as a $1,000 emergency.
If you haven’t saved for such an emergency, you may quickly find yourself in debt. Sure, you can turn to cash advances or credit cards—but these have downstream financial implications that can often set you up for more financial crises. Ultimately, high-interest rates and debt burdens only diminish your ability to deal with financial shocks.
To deal effectively with your emergency and recover from it, follow these four key steps.
1. Don’t panic
If you panic, you’re more likely to make bad financial decisions. So the first thing to do is breathe.Look at your situation from an objective point of view and try to think rationally about your next steps. If you’re still not sure what to do, get advice from someone who’s dealt successfully with a financial emergency like yours.
2. Know your priorities
While you probably prioritize your spending already, you’ll need to re-work that based on the emergency situation at hand. It’s called belt-tightening for a reason. Go through your budget item by item looking for ways you can cut expenses to an absolute minimum. Small cuts add up. Does your new budget reflect your new priorities?
3. Spend only on essentials
Your reprioritized budget can give you a clearer view of what you need and don’t need in your life. Spend only on necessities such as food, shelter, utilities, etc. It all adds up, so eliminating things that may seem like trivial expenses can actually have a huge impact in the end. Don’t spend money on things you don’t need until you’re out of your financial emergency. You may also need to forestall non-crucial payments to improve short-term cash flow.
4. Ask for help
Most important, reach out to others when you’re in this situation. It’s OK to ask for help when you need it, especially in a situation where you can’t face your expenses alone. Though many in your community of friends and family may not all be able to help you financially, they may be able to drive you to work or cook for you once in a while. They may also help you fundraise to get out of your financial troubles.
Keeping these four points in mind, here are some concrete financial resources available to US citizens.
Government assistance programs
The federal government provides each state with grants to operate its TANF program, also known as welfare. TANF programs vary from state to state in terms of eligibility requirements and services. After you apply, you’ll receive a list of services that you qualify for, potentially including help with housing, food, childcare, and more.
This federal program helps people heat their homes during winter and cool them in summer. Their aim is to reduce the number of struggling Americans who die every year from a simple lack of heating or air conditioning. LIHEAP can also help with low-cost repairs to heating and air conditioning systems if those repairs ultimately help lower your energy bill. (Your local utility company may also have reduced rates or other benefits for families in need—it’s worth a call to find out.)
If you need emergency rent assistance, contact your state’s housing finance agency. States vary in terms of the type of support they offer, but their goal is to help people find affordable housing. Services can range from help with down payments for a new home to helping pay your mortgage so you can keep your home.
Nonprofits offering emergency financial assistance
When your finances are stretched thin and you need help with money, Modest Needs can provide short-term assistance. Its focus is on helping individuals and families that don’t apply for traditional types of social assistance but are still living paycheck to paycheck. If you’re eligible, you can apply for a grant with no strings attached.
If you have health insurance but find yourself unable to pay premiums or out-of-pocket medical costs, you can apply for assistance from this nonprofit. Eligibility criteria include income level, medical condition, and health insurance coverage status.
This nonprofit is responding to the rising cost of gasoline by awarding people gasoline-buying grants ranging from $50 to $1,200. The goal is to help individuals and families meet their basic transportation needs so they can continue to get to work, school, the doctor, and more.
What if you aren’t eligible for assistance programs?
Even though there’s help out there, government and nonprofit programs often have stringent eligibility criteria and long application processes—it can take months to receive support. Trying to get financial assistance immediately can be very frustrating. That’s one reason crowdfunding can be such an essential part of your recovery—it can help secure emergency funds fast.
Need help fast? Crowdfunding to the rescue
It might surprise you to learn that not all crowdfunding platforms offer instant access to the funds you raise (you can familiarize yourself with the different crowdfunding platforms using this list). At YouCaring, not only do we provide immediate access to your funds, we don’t take one cent of those funds for ourselves. That’s why our platform focuses on Compassionate Crowdfunding™.