An Unanticipated Expense That Will Make It Difficult to Get By Day-to-Day Would Be a Candidate For…
Have you ever had an unexpected expense crop up out of nowhere and leave you wondering how you’re going to make it through the month? Whether it’s a car repair, a medical bill, or a sudden family emergency, those unanticipated costs can hit hard. When an unexpected expense makes it difficult to get by day-to-day, it can be overwhelming. So, what do you do when life throws these financial curveballs your way?
In my experience, dealing with unexpected expenses is part of life. No matter how carefully you budget or plan, there’s always something that can shake up your finances. But learning how to respond to these situations and understanding the best course of action can make all the difference. In this post, I’ll walk you through what an unanticipated expense that makes it difficult to get by day-to-day could be a candidate for and how you can better manage these financial challenges.
What Is an Unanticipated Expense That Will Make It Difficult to Get By Day-to-Day?
An unanticipated expense that makes it hard to get by day-to-day is typically an emergency or sudden cost that disrupts your regular budget. These expenses aren’t planned for and can quickly throw your financial stability into disarray. Whether it’s a broken appliance, a sudden medical bill, or a vehicle breakdown, these types of costs can make it difficult to pay for everyday essentials like groceries, bills, or transportation.
When I faced a car breakdown last year, I was completely unprepared for the repair costs. My monthly budget was already tight, and that unplanned expense made things much more challenging. I had to scramble to find a solution. Trust me, the stress that comes with such an expense is real, and I’ve learned how important it is to have a plan for these unexpected financial hurdles.
An Emergency Fund: The Safety Net You Need
When it comes to handling unanticipated expenses, one of the best ways to prepare is by having an emergency fund. An emergency fund is a separate savings account specifically for unplanned expenses that could throw off your daily budget. I learned this lesson the hard way. After dealing with unexpected medical bills a couple of years ago, I decided to create an emergency fund. It’s saved me from the stress of scrambling for money when life threw a curveball.
Ideally, your emergency fund should cover at least three to six months’ worth of living expenses. The beauty of an emergency fund is that it allows you to pay for unexpected costs without having to dip into your regular savings or go into debt.
Borrowing Money: A Solution, But Not Always Ideal
If you don’t have an emergency fund, borrowing money might be your next option. However, I’d be cautious with borrowing money, especially if you’re not sure when you’ll be able to repay it. Credit cards, personal loans, or even payday loans are quick solutions, but they come with interest rates that can add up quickly. When I was in a financial pinch, I turned to my credit card for a short-term fix. While it got me through the tough spot, the interest started to pile up, and I realized I wasn’t making much headway on paying it off.
Here’s what you need to think about before borrowing money:
- Interest rates: They can make the expense even more costly.
- Repayment terms: Understand how long it will take to pay back the borrowed money.
- Long-term effects: Borrowing too often can damage your credit score and financial health.
Cutting Back on Non-Essential Expenses
When an unexpected expense comes your way, it’s important to assess where you can cut back on your regular spending. I’ve found that eliminating unnecessary expenses is one of the quickest ways to balance your budget when you’re in a tough spot. For example, during the car repair fiasco, I cut back on dining out, canceled unnecessary subscriptions, and reduced my discretionary spending.
Here are some areas to consider cutting back on when dealing with an unanticipated expense:
- Dining Out: Preparing meals at home can save a lot.
- Subscription Services: Streaming services, magazines, or gym memberships you’re not using.
- Luxury Purchases: Hold off on big-ticket items unless absolutely necessary.
By reducing your spending, you create more room in your budget for the unanticipated expense without compromising your ability to meet your basic needs.
Prioritizing Essential Payments
When an unanticipated expense threatens your day-to-day finances, it’s important to prioritize essential payments. Focus on paying for things that are absolutely necessary, such as housing, utilities, and food. I had to make tough choices when I was dealing with an unexpected expense—do I pay the utility bill or the car repair? My approach was to always cover the most urgent expenses first.
Essential payments typically include:
- Rent/Mortgage: Keeping a roof over your head should always be the top priority.
- Utilities: Ensure you’re still connected to services like water, electricity, and internet.
- Groceries: Eating is non-negotiable.
Once these basic needs are taken care of, you can then focus on repaying any debts or covering other expenses.
Consider Temporary Solutions: Side Hustles and Extra Income
If the unexpected expense is a larger one, or if your emergency fund and borrowing options don’t quite cut it, consider temporary solutions to boost your income. I’ve personally taken on side gigs during financially challenging times. These can help you cover unexpected expenses without affecting your long-term financial goals.
Some ideas for temporary income solutions include:
- Freelance Work: Writing, graphic design, or tutoring are common freelance gigs.
- Delivery Jobs: Working for companies like Uber Eats, DoorDash, or Postmates can bring in extra cash.
- Online Selling: Sell unused items from around your home on platforms like eBay or Facebook Marketplace.
I’ve used side gigs to get back on track after unexpected expenses, and while it requires some time and effort, it’s a great way to stay afloat when life throws you off course.
Negotiating Payment Plans or Extensions
If you’re unable to pay an unanticipated expense right away, negotiating payment plans or asking for extensions is an option worth considering. Many service providers, from medical centers to utility companies, offer payment plans that allow you to spread the cost over time. I’ve had success negotiating with some of my service providers during tough financial periods. It wasn’t easy, but it helped me avoid a major financial setback.
Here are a few tips for negotiating:
- Be Honest: Let them know your situation.
- Propose a Realistic Plan: Show that you can commit to paying over time.
- Ask About Waiving Fees: Some companies are willing to work with you if you ask.
By doing this, you avoid having to pay everything upfront and give yourself more time to manage your finances.
Insurance: A Lifesaver When Unexpected Expenses Occur
Insurance can be a lifesaver in cases where unanticipated expenses are related to health, accidents, or property damage. When I had a medical emergency last year, my insurance covered a large part of the expenses, which made a huge difference in managing the costs. Without insurance, the unexpected expense could have been a major financial burden.
Here are types of insurance that can help cover unexpected costs:
- Health Insurance: Covers medical expenses in case of illness or injury.
- Auto Insurance: Helps with vehicle repairs if an accident happens.
- Homeowners or Renters Insurance: Covers damage or loss to your property.
If you don’t have adequate insurance, consider investing in it, especially if you’re prone to unexpected events.
Conclusion: Planning Ahead for Unanticipated Expenses
Dealing with unanticipated expenses is never easy, but understanding how to approach them can help you manage the stress. I’ve learned that preparation is key—having an emergency fund, knowing how to cut back on spending, and finding ways to bring in extra income can all help when life throws financial challenges your way.
The next time an unexpected expense arises, you’ll be better equipped to handle it without letting it derail your financial well-being. By taking proactive steps, you can continue to get by day-to-day and come out stronger on the other side. Life may throw curveballs, but your financial strategy can make all the difference.