Reviewed here are a few examples of unexpected expenses. Learn to budget for these future adverse events. Their realities are important to understand before they occur, as there may be a chance one of these could happen during life.
There is a popular TV show where the characters in the series live a very comfortable and satisfying life – job promotions happen to each of them, their romantic and family relationships are perfectly in order, and it seems to them their lives are moving as smoothly as planned. Though one day, one of their friends died in an airplane crash.
At the end of the episode, one of the characters in the show stated…
Just when we think we figured things out, the universe throws us a curveball. So, we have to improvise. The universe is funny that way. Sometimes it just has a way of making sure we wind up exactly where we belong.
Meredith, Grey’s Anatomy
This is life! In nature, it’s often hard to predict mishaps or just pure bad luck. Just when you thought everything was going your way, the odds turn out not to be favorable.
What Are Unexpected Expenses?
These unfortunate costs happen to many people.
It’s what to do with the costs, how to prepare for them, and how to have peace amid these situations that count.
Budgeting is a perfect activity that patches the unpredictable. It could take you several hours to account for everything you need to cover. Yet too often, life will get in your way and just destroy financial plans.
Just when you thought everything was covered, such as food, transportation, kid’s tuition fees, utilities, savings, and tithes, your car has a flat tire, or a tornado comes out of nowhere, and your roof needs a repair. And just like that, your budget is messed up.
Truly, there is no absolute way of knowing when life will jinx you. However, there are ways to reverse the curse life gave you. One common practice includes having an emergency fund to cover unexpected expenses. Another practice is getting medical, accidental, flood, or even fire insurance.
With careful financial planning, you can throw caution away entirely and leave yourself to the unexpected. Joking here, of course, as being smart also means not throwing yourself into danger carelessly.
Put money away if possible. A single thousand dollars can cover quite a list of different things. These include flat tires, vehicle collision deductibles, house repair, work hour deductions, and more.
Whether a hundred or a thousand dollars, it helps to begin somewhere. Being in debt while trying to cover debt from an accident or two is an ugly experience that should be avoided.
The 7 Unexpected Expenses Examples
Here a few instances, along with reasons why foresight is important. How to deal with unexpected expenses is important knowledge to possess before they occur.
1. Health Emergencies
Some medical care costs like annual checkups, medicine prescriptions, monthly therapies, and others are predictable expenses you can budget for. But let’s presume your nose won’t stop bleeding, or suddenly you can’t breathe, and you need to go to the hospital. The story then becomes different altogether.
A huge hospital bill is the result of an unforeseen event. Your simple nose bleed turned into a health emergency that wasn’t part of your monthly budget. You can’t afford to pay because you have no money designated for the event.
What should you do? Many health insurance companies offer various health plans you can pay at a single or premium rate. Many people have health insurance through a group plan sponsored by an employer, while others buy it themselves.
Find a cheap solution. You could purchase individual health insurance through a government exchange or affordable marketplace if possible. Finally, there is health insurance from private insurers. The cost of individual health insurance varies due to personal choice in coverage, as well as age, income, location, the number of family members to include in the coverage, and frequency of health care usage. Reliable estimates of your costs can help you compare options to find the affordable health plan that meets your needs.
Is this expense unavoidable? You can test your luck against not getting sick, so medical bills won’t get in your way. However, though you try to take good care of yourself, getting sick is usually an uncontrollable event. You could set aside a budget for vitamins to boost your immune system or shift your lifestyle to being a non-smoker and non-alcoholic. Some negative practices will increase the chances of having heart illness, diabetes, or even cancer. Additionally, you could set a budget for yearly vaccinations. Avoiding communicable diseases can reduce real high future costs.
Let’s put the term “health emergency” into another context. Even if you are the healthiest person in the world, accidents can happen. Maybe your car crashes, and you suddenly need surgery, or your child consumes some puzzle piece. And now you’re in the same scenario. Your bills are turning into huge piles of money you cannot afford.
Again, the solution is simply health insurance. It is undeniable that health care expenses are usually not cheap whatsoever. Through budgeting for health insurance, one could avoid thousands of dollars going out-of-pocket from medical emergencies. If worse comes to worst, one could either cut healthcare expenses by going into clinics instead of a major hospital or asking the local doctor for cheaper treatments and generic medicines.
2. Car Repairs and Maintenance
The frequency here is generally the same as with having a health emergency. You can plan for a money outflow yearly to have your car running with a budget including new tires, a new battery, timing belt, etc. You cannot predict the time an accident occurs or how much damage happens to the vehicle.
On average, reports show that the average cost for car collision damages after being in an accident is over $3,000! Costs could be cheap if you have insurance to cover things. Deductibles could only be $250 or $500 instead of huge repair costs.
Regular maintenance. Studies reveal that following a car’s maintenance schedule assists with avoiding major car problems. Too many people think to cut off their automobile maintenance budget for the sake of saving a lot more money. This routine may set you up for bigger problems in the future.
The DIY route. One way to afford this expense is to become handy with cars by troubleshooting problems yourself. You can change the oil at home, install the transmission itself, or just learn how to paint your car. In these and other particular scenarios, it’s often good to remember, “Prevention is better than cure.”
Take precaution. Before problems become major, you have to catch them. Another piece of advice is to become a defensive driver. Follow signs, driving rules, keep vision on the road, no texting while driving, and no driving after you’ve been drinking alcohol. Even the most careful drivers get into accidents. That’s where automobile insurance comes in. Find one having a good value.
3. Home Repairs and Maintenance
Of course! After preparing for health and auto accidents, the house catches on fire or something else. And then you have to call some service to get a major home repair. There are even other problems more common. Maybe the roof needs repair, or the installation of new pipes is at hand. Whatever it is, some home repairs and maintenance routinely happen, and you can budget for these things.
The DIY route. Just as with car maintenance, house maintenance could become the DIY (do-it-yourself) routine. If your garden needs fixing, instead of hiring a gardener, become the gardener. If you see your roof has a hole, learn to patch it yourself. The internet is a platform where you can be an expert in anything by searching “do it yourself” troubleshooting methods.
House damages often happen due to storms or natural disasters, events no one can prevent. An important way to be prepared for such is through having homeowner’s insurance. Additionally, you may want to get a contractor to do the job for you since major damages are often worth the cost instead of the DIY-headache route.
4. Last Minute Travels
Imagine this – you’ve got a travel plan to Maui and suddenly receive shocking news that your uncle Ben, who is living in Seattle, has passed away. You want to go attend the funeral, because who doesn’t love Uncle Ben? You may want to stay awhile in the region after getting there. Staying leads to extra expenses.
The amount of money you have to spend on last-minute travels can be really important. For instance, say some relative has told you that your sweet cousin Mildred is getting married. You just happen to be living halfway across the country. There is no other choice but to buy a round-trip flight ticket.
Setting money aside for this type of scenario might be completely irrational. With a lack of foresight to such an event, it may exhaust your savings and budget. You may want to begin an envelope for your travel fund just in case an unexpected trip may be needed or wanted someday.
5. Surprise Visits
Guest visits are very common nowadays. You may live across town and have no physical access to a high school best friend. One day, someone knocks on the door. The friend has arrived with her dear sweet husband and three little children. It sounds like a movie – you hug your friend and let her family in.
The costs associated with these surprise visits vary. Some visitors may stay for an hour or two because they have been longing for a chit-chat; others may stay until dinner; and others will stay days or weeks (with the host’s approval). Having some extra money around can help with any associated costs. Some examples include getting extra food, going out to a theatre together, inviting friends out to local events, and other things not considered.
Making an extra-expense fund will help you not get caught up scrounging for money when your BFF (best friend forever) comes with her family and visits. This will allow you to easily and freely open your house for them.
6. Gifts Unplanned
Remember cousin Mildred? Yes, your sweet cousin who is getting married! You still need to buy her a wedding gift. After spending so much money on travel, your gift is an added cost. In some places, gifts are very common not only for weddings but also birthday parties, baby showers, bridal showers, etc. When your budget only allows for common expenses, extra costs take substantial amounts from your savings.
Be proactive and set aside money for special occasions even when you’re not sure of getting invited. You may also make a bit of inquiry. Talk to friends less rarely while trying to anticipate future events themselves. Communicating well can help avoid unplanned expenses for both sides.
7. Pet Care and Emergencies
Admit it. Living with a pet is as expensive as living with a human being. This being stated, pet care and emergencies carry the same principle of budgeting as with health, car, and home emergencies.
Some pet care costs are predictable, like pet vaccines, monthly food, pet grooming, etc. Though what if your pet was bitten by a stray pet or worse, they become missing-in-action somehow? These scenarios are common among pet owners. Either someone’s pet gets sick or is lost, and advertising is needed to find their beloved pet.
No matter how much care is given to pets, they too will become weak and will need special care requiring money. Take your pets to annual checkups to help them stay strong and healthy, or make sure they are eating right and proper. These proactive habits will help reduce the risk they’ll be in bad shape.
The point of budgeting is to ensure that you have enough money for everything. Yes, it is impossible to budget for something you are not aware of or something that you do not see coming. Budgeting for these examples of unexpected expenses will reduce your stress and anxiety as you anticipate the coming of the unknown.
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