воскресенье, 6 ноября 2016 г.

How to Handle Unexpected Expenses

How to Handle Unexpected Expenses


How to Handle Unexpected Expenses


I love how you mention to plan for the unexpected, because we should always expect the unexpected — such great truth in that! Great post, Jessi!


Kalyn Brooke | Creative Savings recently posted…Day 23: Find Clothes for Less


Thank you Kalyn!


Unexpected expenses can be the ultimate downfall to a family’s finances. They go hand-in-hand with Murphy’s Law and they are the biggest complaint when it comes to budgeting. Many people give up trying to budget all together when faced with unexpected expenses repeatedly. Giving up will not solve anything, keep budgeting and put into place these tips to help make unexpected expenses more manageable.


Plan


Yes, there are some expenses that are flat-out, unexpected. However, most unexpected expenses can and should be expected. One example is medical expenses; most medical related expenses should be planned for. If you go into the emergency room, for whatever reason, you should know what percent of the final bill you would be responsible for. Even if you do not know the exact total of the emergency room visit, you should be prepared and you should know ahead of time what your insurance policy covers and does not cover.


Another example is car repairs, many people believe that all car repairs are unexpected but truthfully, if you drive a car regularly, it will need repairs at some point. It will need regular oil changes and maintenance, it will need new tires, and it will wear out and need replacement parts. These should be expected and you should always have your auto insurance deductible saved and ready-to-go should you become involved in an accident.


Cushion


Ensure you are ready to take on unexpected expenses by allowing extra cushion in your budget categories. You know that the car will need repairs from time-to-time but how often do you believe your vehicle will need to be repaired? For example, my hubs’ is a road warrior, drives his own truck for work, and thus, puts many miles on his truck every year. We know to expect, every year to put new tires on his truck and since he travels so much, we put high-quality tires only to ensure that we are getting the most out of our money. Knowing and being prepared every year for this expense keeps us from having to reach for a credit card to make this hefty purchase.


Put as much extra money as you can into your budget categories to ensure that the money will be there when you inevitably need it. If you are struggling to find wiggle room in your budget, you may need to find ways to increase your income (selling off used items, taking on a side job, etc.)


Emergency Fund


I know you are probably sick-to-death of me talking about building up an emergency fund, but it is worth repeating over and over and over again until you get it. An emergency fund is not a fund to purchase a new washer and dryer with, it is a fund designed to keep you afloat when a true emergency strikes, like the breadwinner losing their job. Plan for the unexpected by keeping a well-funded emergency fund at all times, period.


This list is not exhaustive of the many different ways that you can better prepare yourself to handle unexpected expenses. Remember to plan, prepare, and then execute when the inevitable “unexpected” expense arises and you will be able to avoid going into to debt to pay for the expense.


What are the ways that you use to combat unexpected expenses?


Check back tomorrow for another post in our 31 Days of Real Life on a Budget series!


Original article and pictures take http://thebudgetmama.com/2014/10/handle-unexpected-expenses.html site

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