How to Plan for and Manage Unexpected Expenses
Unexpected expenses can throw a wrench into any financial plan. Regardless of budget, there are times when non-planned events crop up: emergencies, severe weather, work expenses, parking/traffic tickets, and more.
Don’t let these surprises derail your financial goals. There are ways to get through a time of fiscal uncertainty, including check cashing solutions. Here’s how you can plan for and manage unexpected expenses:
Have an Emergency Fund or Savings Account
As you plan your budget, make sure to set aside some funds each month for unforeseen expenditures. It’s important that these funds are not touched unless absolutely necessary. Sometimes referred to as “pad savings” or “rainy day funds,” this money should be earmarked for scenarios in which you need quick cash.
When possible, consider paying with cash for irregular expenses such as vacation spending (meals, events), school fees, entertainment and special programs, and other expenses. This will help keep your emergency fund intact, and will also provide a detailed look at where you’re spending your money.
While it’s difficult to know the exact amount you’ll need to cover unexpected expenses, a good rule of thumb is to set aside a predetermined portion of your monthly income. This will grant you peace of mind that you’re covered in times of financial crisis and uncertainty.
Split the Cost with a Future Budget
We all have bills that are paid in monthly installments. There are also once-a-year and occasional payments that are easy to overlook. Property taxes, home insurance, and vehicle registration renewal fall into this category. It’s also a good idea to keep in mind non-recurring payments such as medical bills (dentist, eye doctor), car repairs and maintenance, holiday and birthday gifts, and more.
Since these expenses typically don’t happen every month, you can plan for them well in advance.
In addition, some banks put a monthly limit on the amount that can be withdrawn from savings and other accounts. If accessed too often, funds in an emergency account may not be available for withdrawal when you really need them.
Put Non-Essential Spending on Hold
Most people already hold off on major purchases during times of financial crisis. But the funds already accrued can be accessed when needed. That means if you’ve been saving up for a big-ticket item but suddenly need funds fast, you can tap into that money. Remember to replenish any funds accessed as soon as possible, so you can again begin working toward the previous goal.
While it’s good and admirable to donate to charity, this is an expense that can be tabled when it’s time to tighten the belt. Once the financial crisis is averted, you can go back to making regular charitable donations, or spur-of-the-moment gifts to youth activities and other endeavors.
Get Financial Solution Assistance
Even the best-laid plans sometimes go awry. As you plan for the unexpected, there are always other incidents that can happen, such as theft or property vandalism.
At the least, there are times when a tight budget is stretched to the limit. For example, fuel prices are impossible to predict and are always fluctuating. If your budget allows for a set amount this month, that could be double in a few weeks. As gas prices rise and fall, many people are aware of the need for budget planning.
Don’t sell your valuable items or get caught in an unsafe or uncomfortable situation. Cash on Hold is a great option to get money in a safe and efficient manner. Offering generous repayment terms and competitive interest rates, we can help you get back on your feet financially.
Stop into any one of our 10 Central Florida locations today to get started.
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