4 Common Unexpected Expenses To Always Be Prepared For

Life happens, and sometimes not for the best. It pays to be prepared when things go sideways, and bills come due.

Hopefully, you have some savings in your emergency fund to cover the unexpected costs. A general rule of thumb is to set aside six months of expenses for this fund; however, regardless of how much you prepare to fix a problem, it’s usually better to prevent the problem from happening in the first place.

There is no way of predicting when an expensive financial disaster will strike – but there are ways to prepare so that you can reduce their occurrence and be better prepared to deal with it.

Here are some common emergency expenses to understand and prepare for.

Common Unexpected Expenses

 Unexpected expenses are those that suddenly crop up, catch you unaware, and can shoot your carefully made budget in the foot.

An unexpected expense is something like a medical emergency, a natural disaster such as flooding or storms, a vet bill, or your car falling apart. These things could happen to you at any time, but you can never be sure if they will – or how much they will cost you if they do.

That means you can’t just fit these expenses into your regular budget; it takes a different kind of planning to prepare for them.

How you deal with an unexpected expense depends on what kind of liability it is. For some, insurance may protect you from the cost. For others, you might have to flex your muscles and do a bit of DIY instead of hiring a professional.

For others, there is no option but to dip into your emergency fund. 

1 – Medical Emergencies

Some healthcare costs – checkups, medicines, minor illnesses, etc.– are easy to budget. However, medical emergencies, like emergency surgery or accidents, are completely different scenario that can cost a lot of money.

The financial implications are the last thing that anyone should worry about when sick or dealing with treatment.

Preventative Measures: No one wants to be sick or injured, and it is impossible to prevent it entirely; however, you have some control over your health. Here are some examples:

• If you are a smoker, consider quitting.
• If you drink a lot, look into cutting down.
• Focus on eating healthy, balanced diets and exercising to reduce the incidence of chronic disease and many types of cancer.

Working on improving your health can pay massive dividends. Quitting smoking can save you money on health insurance, and losing weight can save you on life insurance. Additionally, you can turn your goal to get fit into cash by using apps that pay you to walk or signing up for programs that will pay you to lose weight.

Handling the Expenses: Even the healthiest person in the world can become sick or suffer from injury. Thus, having good health insurance is a must.

Health insurance protects you from having to pay huge healthcare bills, turning a substantial and unpredictable expense into an ongoing one you can budget for. While the upfront cost of insurance may not be cheap, it is much more economical if medical treatment becomes necessary in the long run.

Other things to consider to reduce the burden of cost:

• See your doctor regularly to establish relationships and work on illness prevention.
• Use walk-in clinics and urgent care centers instead of hospital emergency rooms.
• Discuss different treatment options with your doctors and cost differences.
• Look for generic drugs and reduce costs through options like GoodRx or Cost Plus Drugs.
• Consider opening an HSA or health savings account. These are pre-tax accounts where you can set aside money each year. They are particularly helpful to use when paying off your deductibles.

Regardless of your age, think about a life insurance policy to protect your family.

2 – Pet Emergencies

Your furry friend can become an expensive addition to your home and family. Anyone who has had to rush their pets to the vet or vet hospital can attest to this.

In such situations, the cost of any treatment does not cross your mind. However, once they are out of danger, you find yourself landed with a massive bill from the vet.

Preventative Measures: It’s similar to protecting humans against illness and injury. Some pet-specific issues to consider:

• To avoid accidental breeding and associated costs, plan to neuter or spay your pet.
• Research common harmful substances or plants for your pet and plan to keep them away from your home or well out of reach
• Keeping your pets indoors or on a leash outside helps protect them from cars and other animals.
• Ensure they receive their annual checkups. Just like with humans, prevention of illness is better than treating one. Early detection is also better for your wallet in the long run. An annual vet visit that you can budget for in advance is a lot cheaper than an unexpected health crisis in the future.

Handling the Expenses: When faced with costly treatment options, you have two choices: make the heartbreaking decision to put them to sleep or pay the bill and deal with the debt later. If you take out insurance, it will cover the cost of significant vet bills, and, as we mentioned with individual medical insurance, a small planned expense is much easier to deal with than an unexpected huge one – or the decision to let go of your pet.

3 – Car Repairs

Anything automobile-related should make it into your regular budget. Cars need regular servicing, tires, and oil changes. What you can’t account for is a major accident that causes significant or widespread damage.

Preventative Measures:

• Stay up-to-date with your car maintenance schedule so there are no unnecessary surprises.
• Depending on where you live, try off-street parking to protect your vehicle better.
• Avoid parking under trees; in large parking lots, try to park in slots that are more isolated from pedestrian foot traffic.

Handling the Expenses: Good car insurance can help you cover and handle repairs and expenses. Often, depending on the expense, you can negotiate interest-free payment plans to help divide payment over time and reduce the burden in the present.

4 – House Repairs

If you’re a homeowner or even a renter, things can happen that may require your attention and checkbook.

Homeowners may encounter broken appliances, busted plumbing, electrical malfunctions, or other minor issues that crop up and require repair.

As a renter, while your landlord should cover everything, you will need to address any damage to personal items!

Preventative Measures: As with anything else, there is insurance. A good policy should cover the total cost of your valuables and assets. Renter’s insurance can help cover rental emergencies, and homeowners insurance can help if you own. Depending on where you live, consider fire insurance, flood insurance, or other natural disaster coverage.

In addition, consider safety measures that may help prevent an expensive accident. Don’t leave small appliances plugged in; if you have pets, don’t leave anything in their path that could cause problems; keep your valuables locked up and safe.

Handling the Expenses: Outside of insurance coverage, consider appliance warranties that may help you replace items free of charge. Many companies will also provide a service wherein an inspector will come and give an assessment for free.

With the advent of YouTube, consider looking up your problems online to see if there’s a DIY solution for minor or even major home repairs. For more significant disasters and expenses, keep track of all the assessment reports, costs, bills, and the like. Submit everything to the insurance company, and keep copies for your records!

Plan Now to Save Money Later

You can’t prepare for everything, but you can reduce the risks. While insurance may cover many unexpected expenses, once the problem occurs, you have to take care of it. Spend some time now protecting yourself and your assets, and save yourself a heap of money and heartache in the future.