Unexpected expenses can derail even the most perfect budget. While you can’t predict when they’ll happen, there are a few expenses that are almost unavoidable especially if you’re married, a homeowner, or employed.
Unemployment. Lots of factors affect how long it will take you to get another job, but the rule of thumb is that it takes one month for every $10,000 salary you were earning. So, the more money you were making, the longer it will take to find a new job. And, the more money you need to have socked away to keep you afloat. Three to six months of living expenses will help supplement any unemployment income or severance pay.
Medical bills. Even with health insurance, you may have medical bills after your insurance pays their part. Facility charges, annual out-of-pocket limits, tests, lab fees, hospital stays, and out-of-network charges can contribute to your out of pocket cost for a medical incident. Unfortunately, predicting your share of the medical bill can be difficult. Just know, if you make a visit to the doctor, there’s a chance you’ll receive a bill in the mail a few weeks later.
Major car repair. The average car repair costs $390.38 according to the 2015 Vehicle Health Index published by CarMD. Ignoring car repairs, for example because you don’t have the money, can make the problem worse and more expensive. In addition to money for car repairs, you should also have a few hundreds dollars to cover the cost of a tow if you don’t emergency roadside assistance through your insurance or another service.
Appliance repair or replacement. Most home appliances are necessities, so when one of them goes out, living without it isn’t an option. Most homeowners pay between $109 and $238 for appliance repairs, with some homeowners paying as much as $350, according to HomeAdvisor.com. Of course, if the appliance needs to be replaced, the bill will be much higher.
Home repairs are another reality of home ownership. Some repairs – like replacing a roof – can cost several thousand dollars. Generally, the older your home, the more likely it is that it will need repairs. Homeowners should set aside money every month to cover unexpected home repairs.
Divorce. Statistics continually show that a large number of marriages end in divorce. Not only is the legal process of divorce expensive, life after divorce is also financially strained. One ex-spouse may be responsible for paying spousal and child support. Another ex may have to work harder to make meets meet with one income. Separate savings accounts can help soften the blow for both parties.
Even if you never have to deal with any of these specific expenses, there will be some type of unplanned expenses. Being prepared is key to avoiding a worse financial disaster.