We don't like to to think about it, but these things do happen. Would you be able to meet any emergency expenses if you were out of work for an extended period of time due to illness or injury? The thought can be frightening, especially for those who don't have substantial savings.
Colleen Schueneman, general agent at MassMutual South East Michigan, says disability insurance works when you can't — providing a steady stream of income when you need it most.
Pet expenses can add up quickly, and it's difficult to say no to saving your furry family member. Vet bills sometimes run into the thousands, so consider pet insurance to help offset some of those costs. A separate pet expenses savings account where you automatically transfer whatever the cost of pet insurance would cost you is another solution.
"This way, if you need the money, you have it," says Kelley Long, CPA and member of the National CPA Financial Literacy Commission. "But if Fido lives a long, healthy life, you haven't wasted the money on unnecessary insurance."
Car repairs and health care costs are commonly touted unexpected costs, but if a friend or family member invites you to a wedding on short notice or your child has a surprise — and costly — field trip, these can be unexpected costs as well, says AJ Smith, managing editor at SmartAsset.
"You can either dip into that emergency fund, which you should quickly replace, find some room in your current budget by skipping the family meal out that week or putting clothing purchases on hold, or you can say no," he said.
One surprise for many is the cost of education. While people know that tuition can be expensive, they often don't factor in costs such as dorm essentials, books, prep classes or even room and board, points out Debby Hohler, spokesperson for Upromise by Sallie Mae.
For those who have online shopping to do, try Upromise, a program that gets you five percent cash back for education when buying from certain locations. "Programs like this are a simple and effective way to pad your savings without having to cut back on savings," Hohler said.
You might have all your ducks in a row when it comes time to purchase a home, but Paul Jacobs, a certified financial planner with Palisades Hudson Financial Group, says there's one duck you're likely forgetting.
"First-time homeowners are often surprised at all the unexpected expenses that they have to deal with," Jacobs notes. "Make sure to set aside additional cash each month, above and beyond the amount you spend on recurring expenses like the mortgage payment or utility bills, for the unexpected."
No matter the surprise, you'll be glad you set aside cash for these situations.
What are some unexpected expenses you've encountered? Sound off in the comments below.
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