Today I want to share with you some common unexpected expenses, and why you need an emergency fund in order to deal with these. This is because more than likely we will not budget for these expenses, which leaves us left wondering where we will find the money to pay for them! No matter how financially prepared you think you are, life will always throw something unexpected your way!
- Medical, dental, and vision expenses
- Sick Pet
- Laptop breaks
- Car breaks down
- Need to purchase a new car
- Plumbing problem
- Electrical problem
- Clothes for a new job that requires you to dress up every day
- Get sick and you don’t get paid sick leave at work
- Mobile phone breaks
- Expenses for your kids extracurricular activities
- Washer/Dryer/Fridge/Dishwasher/Oven breaks down
- Destination Wedding for friend/relative
- Family emergency
- Gifts for baby shower, wedding shower, housewarming, etc.
- Flat tyre
- Fines e.g library fines, speeding ticket
- Electronics Replacement, eg. computers, phones, cameras
- Hospitality, eg. guests visiting, throwing a party, food
- Household supplies, eg. cleaning supplies
- Gardening expenses, eg. soil, seeds, fencing
- Furniture replacement
- You lose your job and you can’t find another one with the same rate of pay
- You (or your partner) unexpectedly get pregnant
- You find yourself with a debilitating illness
- Your hours are cut at work
- A friend or relative in crisis moves in with you for a while
- You’re evicted from your home
- An unexpected bill
- Your account becomes overdrawn
There are a number of ways you can prepare for unexpected expenses. One is to save more money. Set aside a small amount in your monthly budget for your emergency fund, and you’ll have no added stress when any of them pop up.
To create an emergency fund, open up a savings account make a commitment to put money in every month. You could even set up a standing order so your bank does it automatically.
An emergency fund is cash you have saved that you can dip into in an emergency. An emergency fund should be enough to pay all your most important bills for several months. Three months worth of your income is a good minimum to aim for, although the exact amount you need depends on your circumstances.