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July 18, 2023We’ve all been there! You’re trying to make it to your next paycheck with a challenging budget. You can’t even afford a short weekend trip because of unexpected expenses. It’s the worst feeling! But don’t worry! This article will answer the question: “What’s the best way to pay for unplanned expenses?” Let’s dive into some practical tips and tricks to help you cover unexpected expenses quickly.
How Can You Plan for Unexpected Expenses?
First, you must expect the unexpected. We know it sounds like a cliché, but it’s true. Life has a funny way of changing game rules when we least expect it. So, instead of being caught off guard, learn how to plan for unexpected expenses. Set aside some money each month specifically for those unexpected expenses. It doesn’t have to be a considerable amount, just enough to give you breathing room when the unexpected comes knocking on your door.
Also, it’s crucial to stay on top of your financial situation. Monitor your bank accounts, credit card statements, and bills. By being organized and aware, you can catch any potential issues early on and address them before they become costly.
Unexpected Expenses Examples
Monthly expenses have an extensive definition that varies from person to person. You can have enough money for daily costs, but financial emergencies are unpleasant surprises. So, here is the list of the most common unexpected expenses examples:
Medical Emergencies
Imagine you’re minding your own business when suddenly you fall down the stairs or catch a nasty flu bug. Next, you’re stuck with hefty medical bills, prescription costs, or maybe even a trip to the emergency room.
Car Troubles
Having a vehicle that helps you move faster is excellent, but unexpected car expenses can hit you like a ton of bricks. From sudden breakdowns and repairs to flat tires and spontaneous parking tickets, your beloved four-wheeler can become a money-eating monster.
Home Repairs
Your house is the most comfortable place to rest, but not when your plumbing decides to go haywire, your roof starts leaking, or your appliances go on strike. Whether it’s a burst pipe, a malfunctioning AC unit, or a leaky faucet, home repairs have a knack for showing up uninvited and emptying your pockets.
Job Loss
Losing your job is like getting sucker-punched by life. Suddenly, your steady income stream dries up, leaving you scrambling to pay bills, cover rent, and put food on the table. It is an unwelcome surprise that you can’t manage without a financial pillow.
Pet Emergencies
Cats and dogs may be adorable but can also be a financial liability. Vet bills, grooming costs, and unexpected trips to the pet hospital can quickly drain your bank account. And let’s not forget those sneaky little surprises they leave on your carpet that require expensive cleaning services.
Legal Fees
Nobody likes getting caught up in legal trouble, but it can be a significant wallet-drainer if it happens. Whether hiring a lawyer for a divorce, settling a dispute, or dealing with unexpected fines or traffic tickets, legal fees have a knack for popping up at the worst possible moment.
Technology Mishaps
We’re living in the digital age, so technology is practically necessary. But what happens when your laptop crashes, your smartphone decides to take a swim, or your trusty TV screen goes black? Cue the panic and the unexpected expense of replacing or repairing your beloved gadgets.
10 Tips for Paying Financial Expenses
Dealing with unexpected costs can be challenging, but don’t sweat it! There are always working solutions! Here are five tips to help you navigate those financial curveballs:
1. Embrace the “Emergency Fund” Mindset
Setting aside money in an emergency savings account for emergencies sounds about as exciting as watching paint dry, but it’s a game-changer. Start saving and squirreling away a small amount of your monthly income, even if it’s just a few dollars. Over time, you’ll build a safety net to catch you when unexpected expenses pop up.
2. Get a Loan from a Direct Lender
If you think your budget can’t survive and you don’t have an emergency fund, try a small 100 dollar loan to pay for an unexpected expense. Lenders don’t track how you use this loan, so you can use it for everything you want. You may need to borrow 100 dollars to pay your medical or utility bills, cover repair works, or pay rent.
3. Cut Some Starbucks Trips
We know you can’t forget about your morning coffee. But when those unexpected expenses hit, it’s time to hit the pause button on your pricey caffeine fix. Temporarily ditching some of those little eating-outs or subscribing to all the streaming services can free up some cash to tackle those unexpected bills head-on.
4. Use your Credit Card
If you don’t want to deal with personal loans, try to use your credit card to withdraw money. Borrowing money is hard, but you can make it by using your credit card rationally. Maybe you could try 0% APR credit cards with an introductory period. After it ends, you’ll pay a regular interest rate.
5. Search for Discounts & Coupons
Look for discounts, coupons, or even second-hand options for whatever you need. It’s like going on a treasure hunt, but instead of finding a chest of gold, you’re finding significant savings for your emergency funds.
6. Request a Salary Advance from Your Boss
As your unexpected expense can’t wait, discuss it with your boss and request a salary advance. It’s perfect for covering unexpected expenses if you don’t have an emergency fund. So you borrow money from your paycheck, and next month you’ll receive less, but your unplanned expense will be paid on time.
7. Negotiate Your Payment Plan Ahead
Contact your service providers, explain your situation, and see if there’s room to lower the cost or set up a payment plan. You’d be surprised at how often they’re willing to work with you.
8. Seek Out Extra Cash Flow Opportunities
When you don’t want credit card debt, it’s time to get creative! Explore opportunities for some extra cash flow to ease the burden. Consider picking up a side hustle, freelancing, or selling things you no longer need.
9. Borrow from Your Retirement Account
Can’t deal with living expenses? Borrow a personal loan from your retirement account. So you get money from your 401(k) retirement plan to pay for your unexpected events. The interest rates are repaid to your plan account, not to a financial institution. The maximum amount you may borrow from your qualified plan is 50% of your vested balance or $50,000, whichever is less.
10. Rely on Your Friends and Family Members
Discuss with your friends and family members if you don’t have a good credit score or a health savings account. Maybe they are willing to lend you money with no interest rate. Such a short-term loan will help you reach your financial goals quickly.
However, if you aren’t careful, borrowing money from someone you know can hurt your relationship. Choose this option only if you can repay the money in full. Also, you can create a formal loan contract. It could make you a more appealing borrower and reassure your “lender” that you’re serious about paying them back.
Bottom Line
We hope our guide will help you assess your budget plan and get extra money for whatever you need. Don’t be afraid to find new ways to pay your expenses. Be it credit cards or a personal loan with lower interest rates, choose wisely, and you’ll improve as soon as possible.
It’s almost impossible to avoid unexpected costs, but you can be as prepared as possible to handle them. Building an emergency fund, lowering your credit utilization, boosting your credit score, and getting everything planned will prepare you for the next financial surprise.