Have you ever attempted to follow a budget, only for those plans to go out the window? A pipe bursts, your car breaks down, or you need to rush to the ER. Now the money meant for rent and groceries has to cover these unexpected expenses, too.
Can you stretch it that far?
If the answer is “no,” you wouldn’t be alone. More than half of Americans have zero savings set aside for an emergency.
Some may choose to turn to installment loans when they’re in a lurch. They’re a convenient way to bridge the gap between your budget and unexpected emergency expenses.
But like any loan, they cost money in interest and other possible fees. You should borrow only what you need in an unexpected emergency when your savings are low, then focus on building out an emergency fund so that you can handle the next unexpected expense.
But how do you know if your fund is ready for the real world? Here are five unexpected emergency expenses you should factor into your savings.
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1. Car Trouble
If you drive a vehicle around town, you may already budget for its annual tune-up and the cost of filling up the tank. But your auto budget isn’t complete until you set aside cash for unexpected car trouble outside your usual maintenance and repairs.
According to the AAA, you should save at least $50 a month in case your car breaks down without warning. This cash can help you with anything that isn’t covered by insurance, your warranty, or usual vehicle costs.
2. Household Repairs
When you own your home, you can expect to invest some money into its upkeep. According to this rule, you should set aside about one to four percent of your home’s value for ongoing repairs. These savings should be enough to help you when you need to tune up your HVAC system, call in a plumber, and replace a broken appliance.
But what about those years that seem like they’re cursed. Not only does everything go wrong, but they also tend to require costly repairs—like a new roof, foundation patching, flood damage.
This is where your home insurance may come in handy. You may also want to talk to the repair services about a possible financing payment plan that breaks up your repair’s cost into smaller installments.
3. Medical Care
It doesn’t matter how healthy or careful you are, an accident or medical emergency can happen to anyone. One day, you might badly burn yourself while cooking, or your appendix can burst without warning.
Rushing to the ER costs a lot of money, so think about getting health insurance. Your policy may cover most of these medical bills, but don’t be surprised if you have to pay a large deductible. Try setting some savings aside for emergency medical expenses and search out personal loans that can pick up the slack.
4. Pet Emergencies
Your pets are part of the family, and just like you, they can fall ill or get injured. Veterinarian care can be a costly burden, especially if you don’t expect it. That’s why many pet associations advocate for owners to set aside a little cash in savings to help with unexpected medication, tests, or procedures.
Check out pet insurances to see what they cover in terms of treatments. There are also pet charities that help find financial help for owners who can’t afford vet care on their own.
Although you may not be able to predict an unexpected expense, you can bet you’ll run into an emergency at some point in your lifetime. Be prepared to your best ability. Remember these tips and keep an online loan as a safety net if they don’t work.