The best type of insurance anyone can have is an emergency savings set aside for a rainy day. While most people are aware of the importance of this financial tool, many struggle to save enough to cover a financial emergency when it unexpectedly shows up – and it always shows up. A major car repair, a medical bill, or a home emergency seems to strike at the worst possible time. When there isn’t enough money in the bank to take care of large, surprise expenses, it is easy to get overwhelmed and put your head in the proverbial sand. Instead of avoiding the inevitable, here are a few tips to help you through your next financial emergency without all the stress.

Avoid the Panic

The easiest thing to do when a big expense rears its ugly head is to retreat into panic mode. Questions about where the money will come from and how regular bills will be paid abound, but it is necessary to keep a cool head. You can side-step feelings of overwhelm by waiting a day or two to make major decisions. That may seem counterintuitive, but moving quickly to try and cover surprise expenses is often a costly mistake. Think through your options before you list all of your valuable belongings for sale, and consider reaching out to a friend or family member to vent. They may offer some solutions that are sure to be better than what your frantic mind is thinking.

Know Your Credit Options

Running to credit as a solution for every financial emergency that comes up is not a smart plan, but in a pinch, knowing your options for borrowing money is incredibly helpful. Get to know your local lenders who specialize in short-term, quick cash, like thenetlender.com in California or a community credit union in your neighborhood. Lenders in your area are more likely to be understanding of your circumstances, and they can provide a plethora of lending options that work best for your situation. Review credit cards or lines of credit to see if there is room to add a bigger expense, even if it’s for a short period of time. Understanding these outlets for borrowing can help ease the hit of a financial emergency as payments are spread out over the course of a few months to a few years.

Always Cover Your Essentials

Part of the concern that comes with a financial emergency is one’s ability – or more accurately, inability – to cover regular monthly expenses. Rent or mortgage payments must be made, as do debt obligations and basic living expenses, no matter what unexpected bill shows up in the mail. To best prepare for a financial surprise, work through a budget in advance to get a clear understanding of what money is coming in and what payments are required to go out. Knowing this information intimately will help you cover what’s completely necessary while you work through options for paying off a big expense.

Plan Ahead for the Next

The best step anyone can take in preparing for a financial emergency is to plan well in advance. Being prepared does not mean you have to constantly think about what financial surprise could pop up, but instead, it means focusing your energy on knowing what to do when one does. If you’re able, create an emergency fund that you contribute to each time you are paid, and be diligent in leaving it alone until you really need it. Keep your credit cards and lines of credit well under their maximum limits, and keep other debts to a minimum when possible. Taking these small steps will ensure you have wiggle room when an unexpected bill comes your way, and there will be less stress involved in the process of covering it.