Life has a habit of throwing us a curveball while we’re looking the other way. Personal finances are a perfect example of the above. You may have lots of plans for your money, from saving up to go travelling, gaining more education or even pursuing a dream such as setting up your own microbrewery. But if a few unexpected costs crop up, they can quickly derail the plans you had for your money. Everything from expensive repairs to your home and care to serious illness and unplanned pregnancy – there are plenty of situations which can knock you for six financially. So how do you cope when you get a bunch of unexpected expenses?
A lot of the time, expenses that seem unexpected can actually be accounted for. For example, if you own a home, it’s reasonable to expect that it will need some form of maintenance work each year. Many experts suggest budgeting for 1% of your home’s value each year in essential repairs. You can budget for this over the course of a year as an item in your monthly budget. Some expenses depending on life stage you are at. For example, if you’re expecting to start a family in the next few years, you may want to set aside a small amount from your paycheck to balance your or your partners reduced earnings during maternity leave. If you start early, this doesn’t have to be a huge amount as you have lots of time. Similarly if you are retired, then you may want to think about the financial implications of later life, such as the cost of care or supported living and even a plan with a supplier like Heart of England funeralcare. Birth, taxes and death are certainties in everyone’s life, so there’s really no need to get caught out financially.
Truly Unexpected Expenses
Although to some extent you can mitigate unexpected costs in some areas, there are still always times when something truly unanticipated happens. Take your car, for example. Although you can budget in running costs for things like wear on tyres, regular servicing and a timing belt, sometimes mechanical failure will occur. Simple things like adopting a more economical driving technique can not only save you money on your fuel bill, but also reduce the general wear and tear on your vehicle. Also make sure that you follow a regular maintenance schedule in order to avoid minor problems developing into large, expensive ones. Another unavoidable sudden expense can be unscheduled travel – not for a vacation but for family events. Although it’s generally the case that last minute travel will cost more in fares, make sure you still shop around – for example, use a site like Skyscanner to see if catching a couple of connecting flights could work out cheaper than a direct one. Pack your own food and snacks to save on meal expenses while in transit, as airports and service stations are some of the most costly places to eat. A lot of occasions like this also require a gift, which can eat into your budget quickly. If you don’t have money in the budget to cover it, think about what you could do for a homemade gift. Whether it’s baking a sweet treat or doing something crafty, something highly personal often means more on a special occasion. With a little bit of planning and ingenuity, you can meet unexpected expenses without derailing your budget and going into debt.