Be Prepared: Six Unexpected Bills You May Have To Pay Someday
One of the key elements in any budget is an emergency fund. It is important to set money aside for emergencies so you aren’t caught off guard with expensive bills. The fact is that while unexpected expenses are unpredictable, they usually fall into one of a few categories. Below are some of the more common unexpected bills you should prepare for:
Broken Equipment
Every appliance, tool or electronic device has the potential to break. The damage will often occur at a time when you need the item most. Since most of us rely on electronics to handle basic everyday tasks, broken items will have to be replaced or repaired as soon as possible, which can be expensive. To lessen the changes of paying for expensive repairs, keep up with maintenance and take care of minor fixes before they become worse.
Medical Care
One study reported in the American Journal of Medicine showed that health care costs contributed to 62 percent of all the bankruptcies that occurred in 2007. That this was before the worst of the recent recession. The high cost medical care can result in a sudden and devastating blow to the budgets of many middle and working class people. Even if you have insurance, something like a car accident can put in the hospital and cause high medical bills. Set aside a savings account for such emergencies so you aren’t caught off guard.
Car Repair
Whether it be a punctured tire or a blown head gasket, vehicles have a way of developing serious problems overnight and when you least expect them. When you need your car to take you back and forth to work, doing without is not an issue. Replacing car parts can be very expensive, but they must be done, so it’s important to have a budget set aside for such repairs. Keeping up with regular maintenance can help keep your car working as it should, resulting in less major repairs.
Birth
While the birth of a child may not exactly be unexpected, the cost of it can be. New parents in particular may be unaware of just how expensive their baby will be. From medical costs to unpaid time off work, the bills associated with a birth can have an impact that lasts for a long time. Know what your insurance coverage is, and be sure to pick a hospital that fits your needs. Even with the same insurance company, costs can widely vary between hospitals.
Child Support
The cost of a birth is hardly the only unexpected expense associated with having a child. From unexpected child support increases to a sudden divorce, surprise child support bills are not unheard of. Talking with a child support divorce attorney can help save you money, however, it’s still important to have a budget for this. Since every case is different, there is no set amount you can prepare for.
Home Repairs
If you own a house, you are almost guaranteed to have a major repair expense at some point. From flood damage to a broken HVAC system, the number of things that can go wrong with a home is enormous. While you may be capable of handling some of them without calling in a professional, they can still be expensive in terms of materials and time.
Property tax bills, life insurance premiums and other such expenses should not be categorized as unexpected since they are recurring expenses that may be planned for ahead of time. Be sure to set aside some savings to prepare for any unexpected bills. With the right financial preparation, you can be able to pay for these unexpected bills without having to break your budget.
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Category: Financial Education, Financial Planning
