Unexpected expenses can occur anytime, and they can catch you by surprise. Even if it’s a loss in income, a large medical bill, or a household repair, you can still plan for them in order to minimize the impact on your financial stability.
If you have gone through something like this, then you already know how unpleasant it is. If you haven’t, then you should prepare for it.
Let’s see how not to get caught by surprise when it comes to unexpected expenses.
Put Money Aside
To ensure the fact that you won’t spend the money you save, you should open a savings account or an emergency fund. Or both if you want.
That way, you won’t be tempted to tap into the account as much.
The best alternative, which we highly recommend, is to open a separate account that will be harder to access.
This will also help you keep track of the amount of money you’re saving.
Identify Previous Unexpected Expenses
We’ve all had until now at least a couple of unexpected expenses. Try to identify the most recent ones and group them into categories if possible.
Doing so may be able to help you predict future irregular expenses and prepare you for them.
For example, if you need to attend a wedding this year, break down all the costs that are involved for the event to see how much you need to save.
At the same time, there will also be certain expenses that cannot be predicted. That’s why it’s important to take into consideration the previous tip.
Prepare For The Worst, Expect The Best
“This will never happen to me” is the kind of attitude that you want to avoid. Instead, you should do everything you can to be as prepared as possible.
You can’t control your health 100%, weather catastrophes or other people’s behavior.
Here are the most common examples of unexpected expenses you should prepare for:
– Health issues. Medical visits usually cost a lot of money;
– Car troubles. Reckless drivers can damage your car even if you’re an experienced driver;
– Home repairs. Many things can malfunction or break in a house so you should be prepared for bigger or smaller maintenance issues;
– Gifts. Weddings, parties, anniversaries, baptisms, holidays – these expenses can get pretty high, especially if you remember about them on the last minute.
Adjust Your Budget
If an unexpected expense occurs, but you don’t have a savings account or an emergency fund, then you will need to adjust your monthly budget to cover for it.
This tip can work even if you have an emergency fund. You can find ways to spend less from your monthly budget. That way, you will need less money from the fund or savings account.
Do You Know What Happens To Your Money?
If you’re like most people, a pen and paper just won’t do when it comes to keeping track of your finances.
To be able to plan for any expenses that may occur, you first need to know how you spend your money. If you want to have a better overview of your expenses, income, bills, and loans, and increase your financial stability, try out CashControl.
Your financial management buddy is just one click away.