In life, nothing goes the way we want it to. We can sit down and make a budget for every kind of expense that comes our way in life, whether it be food, housing, transportation, but nothing is going to go our way 100%. In other words, there are unexpected expenses that stress our budgets. This could be in the form of another car from the opposite side of the road sideswiping towards us, the water heater in our house bursting, our infant swallowing a rubber band by accident or anything else that we never expected to turn up.
And no matter how hard we try, there is just no way that we can avoid these disasters when they occur. What we can do, however, is to plan ahead as best as possible to prepare for them. One way of doing this is to start an emergency fund in order to have unpredictable expenses covered. We can even carry insurance to safeguard us from numerous issues that could result in bankruptcy, such as automobile accidents, or medical emergencies. In other words, there’s a lot that we can do to get out of a financial inconvenience with just a bit of planning.
Let’s take a closer look at the number of unexpected expenses examples that come our way and what we can do to avoid them.
If you think your vehicle’s warranty will cover any unexpected expenses that are beyond your control, think again. Even if you have a new car and you’re driving right behind a truck that all of a sudden drops its trailer that leads to both your tires getting damaged, this is an expense you have to deal with on your end as the warranty won’t be able to cover it.
Other expected expenses include wiper blades, engine maintenance, and oil changes. Besides this, there’s also vehicle registration, but this only comes once a year so it shouldn’t be at the top of many people’s minds.
Sometimes insurance companies have customers pay every six months or yearly rather than monthly. Let’s take the example of a fuel pump going out from an old 2010 vehicle. According to the price estimator on cars.com, it takes around $612 to $877 to have it replaced. And if you’re paying off a debt with only $1,000 worth of emergency fund available right now, this oil fuel pump exchange is almost certainly going to wipe away the funds if you’re not using them for anything else.
And that’s exactly why we said that even if you have a new car or not, something is going to go wrong sometime in the future.
For any vehicle-based maintenance job, you should begin with a budget of $50 a month. You may want to consider more depending on how old your vehicle may be – or if you have more than a single-vehicle. Doing this will grant you about $1,800 in the bank by the time your new vehicle’s 3-year warranty has been used up.
Some health care expenses including medicine, timely check-ups, or minor illnesses are pretty normal to account for. However, if your appendix stops working all of a sudden, or when you get hit by a bus, then that’s an entirely different situation. It’s at this point, you have no other choice but to deal with the trouble of getting rushed to the hospital for surgery, the pain regarding that your life could be in potential danger, and the stress of your condition all at once. And then there’s the overwhelming bill that is impossible to pay off.
CostHelper reports that those who don’t have any health insurance will be charged somewhere between $150 to $3,000 for an emergency room visit – which is for an ER visit only. There are also lab fees, tests, and particular services like sutures that can bring the total to hundreds maybe even thousands of dollars more. And if you end up getting admitted to the hospital for any kind of critical care or surgery, CostHelper estimates the total bill that you’ll be facing to be $20,000 more.
To avoid having to deal with high medical expenses, you need to do your best to avoid not getting sick. If you think there isn’t anything you can do to keep yourself from falling ill, then you’ll be surprised to learn otherwise. One of the simplest things you could do is to eat healthy, exercise, and prevent yourself from smoking to lower your risk of contracting major conditions like heart disease, diabetes, and cancer.
But even if you are the healthiest person in the world, you’re not immune to injuries. And that’s why there’s something known as health insurance. This is what keeps those fat health bills away, preventing unexpected expenses from turning themselves into an ongoing headache.
Nevertheless, health insurance isn’t going to be cheap. eHealth says that the average cost of a health insurance policy is $321 a month for one person and $833 for an entire family. However, if your income is low, then you can get a subsidy to cover part of that cost under the Affordable Care Act (also known as Obamacare).
After doing a little inspection of your humble abode, you are surprised to find how many house accessories, walls, and fixtures need fixing. We don’t blame you for flipping your cap.
Imagine if you were in the middle of installing a new water softener or water heater and all of a sudden you realize that there was some extra work that needed to be addressed such as the drainage in your crawl space which brought the total bill to $1,600. And then a couple of months later you found out that the tree in your backyard was dying so having it removed cost another $1,300.
It is indeed one enormous financial burden, but you need to take care of this in order to prevent a possible injury that could have resulted from the tree eventually falling on you or any of your family members.
Similar to car problems, any minor problems within your house could turn into a bigger issue if you don’t deal with them immediately. In other words, whenever you see anything wrong with your house, you should immediately jump right ahead and fix the issue to save up money on home maintenance. For instance, fixing a small leak could end up saving you a thousand to replace walls that have been damaged by mold sometime later.
And don’t just stop with house maintenance itself. For example, you should also take care of your yard to prevent further damages to your house, like cutting down the branches of your tree so they don’t fall on to your house during a high wind.
Of course, you can save much of the costs on home maintenance if you do them on your own. However, it isn’t necessary for you to do any type of repair or maintenance that is beyond your capability or skills. For this, you need to factor in the time, safety, and cost before you ought to hire a professional contractor or do the repairs by yourself.
Here are a couple of general tips that will show you how you can handle unforeseen expenses, no matter what they may be:
Not every expense is created equal. For instance, you’ll find that the cost of going on a flight to a bachelor party is different than the cost of repairing a car. What we’re trying to say is that you need to determine what’s more urgent and what isn’t.
You need to sell off some of the assets are items that you don’t use or serve no practical purpose. You can take advantage of direct selling apps like OfferUp or Let-Go for a quick cash grab.
If you’re undergoing any type of financial emergency at the moment, then you’ll need to cut back on some unimportant spendings. Buy only a few of the essentials so you have enough money for unexpected purchases. Instead of ordering out, make meals out of food and pantry staples in your freezer.
When unforeseen expenses are involved, it’s not the matter if they will happen, it is the when. Walls will start crumbling, appliances will break down, and your car’s engine will give out. So do your best by preparing an emergency savings account. If you start by saving a small portion of your paycheck, you’ll have enough eventually to form a sizable financial safety net.
With extensive planning and repairing an emergency savings account.
There is no one best way to deal with unplanned expenses. There are numerous options such as the government, the taxman, having a payment plan, or a personal loan.
There are plenty of ways to do this, including having an emergency savings account, an interest-earning savings account, and more.
Some experts recommend that you start off with a few hundred dollars in a beginner emergency fund. They also suggest that you need to save between 3 to 6 months of the expenses in your emergency funds.
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