Have you ever had an “off” month financially, where several unexpected expense came up, leaving you desperately waiting for your next paycheck?
Unfortunately, no matter how well we budget, there will always be uncontrollable expenses that arise.
The good news is that we can expect to have unexpected expenses. By saving in an emergency fund and setting reminders of when certain expenses occur, we can better prepare ourselves financially.
So, take special note of these 10 unexpected expenses to plan for ahead of time.
1) Car Repairs
Cars break down when we are least expecting it, and admittedly, it can be one of the most inconvenient expenses.
For most of us, cars are a necessary investment. Plan for your car to have issues sometime this year by setting money aside in an emergency fund.
And by performing regular scheduled maintenance on your car, such as oil changes and rotating the tires, you are ensuring that your car is running at top capacity.
2) Medical Expenses
Like car repairs, when medical emergencies come up, they need to be addressed urgently. You can keep your family’s health a top priority by investing in a medical emergency fund and making sure you have adequate insurance.
If you are on a high deductible health plan, an HSA is a great way to protect yourself in the event of a medical emergency. HSA’s, or health savings accounts, are a tax-free savings account that you can use for medical purposes. The best advantage of an HSA is that the money rolls over from year to year, so you can build it just like a regular savings account.
3) Higher Utility Bills
Depending where you live, your utility bill may skyrocket during certain times of the year, much to your dismay.
As conservative as you may try to be with setting the thermometer, sometimes hot is just too hot and cold is too cold.
Don’t forget to budget in higher utility expenses for those extra hot or cold months. If you live in a house, you can save money in utilities by purchasing a programmable thermostat, so it’s only running when you need it most.
4) Car Insurance Premiums
Often times, car insurance companies will offer you a discount if you pay your insurance premiums in whole every 6 months. While this might save some cash, it can be tricky to keep up with.
You can protect yourself from a hefty, unexpected car insurance bill by putting reminders in your calendar and by socking money into a car insurance savings account every month.
5) A Pet Emergency Fund
A pet emergency fund, or even pet insurance, is a must for any responsible pet owner. Unfortunately, we can’t always tell when something is wrong with our pets, so many of these major medical treatments can be quite a shock to us financially.
Keep your pet healthy and protected by scheduling regular vet appointments and having an emergency plan in place.
6) Gifts
We can probably all remember a time when we were running to the store for a last minute gift for someone. By doing that, we not only are putting unnecessary stress on ourselves, but we are also forgetting to add the cost of the gift to our budget beforehand.
You can prevent this last minute budgeting error by setting aside money every month for gifts. When you’re looking ahead for the next month, be sure to make note of any birthdays, weddings, or other major events.
And by planning ahead, you are allowing yourself more time to search for the perfect frugal gift or to make your own.
7) Home Repair Costs
Washing machines break, dishwashers overflow, water heaters malfunction, and air conditioners die at the worst possible moment. Home repairs are not only costly, but they are typically urgent.
An emergency fund can be a literal lifesaver in some home repair circumstances, so be sure you are factoring in the cost of most major home repairs and saving accordingly.
8) Quarterly Taxes
If you are a freelancer or business owner, you are obligated to pay quarterly taxes to the government. Since you don’t get a regular paycheck and have taxes automatically deducted, it is now your responsibility to estimate how much you owe in taxes and pay every quarter.
Since you likely aren’t able to predict your income accurately, you will have to estimate how much income you think you will earn. A general guideline is to set aside at least 25-30% of your earnings for taxes. Keep in mind, if you end up earning significantly more in a quarter than you anticipated, you will have to pay more in taxes. To be on the safe side, it’s a good idea to always save more than you think you will need.
9) Technology
As we grow to rely more and more on technology, we can really be left in the dark when our devices have issues.
And let’s be honest, most of us have dropped our phone several times, often resulting in a cracked screen. Unfortunately, it can cost hundreds of dollars to fix or replace something as common as a shattered phone.
Some people may opt to purchase insurance or extended warranties on their tech, but oftentimes, the protection plan costs more than it would be to simply replace the item.
You can prevent a major financial burden by doing your research before you purchase, saving money for tech maintenance, and by investing in proper cases to protect your phones, laptops, and other tech.
10) Seasonal Clothing
It seems like no matter how hard I try, with the start of every new season, I end up running to the store to purchase some new seasonal clothing items that I needed. Since it is before or during the season, that means these clothing items are rarely on sale.
To counteract this and to save some money, I’ve been trying to take inventory after a season is over. For instance, when winter is over, do I need a new coat? Gloves? Boots? Or after summer, do I need more sandals? Beach towels? Wedding guest dresses?
By purchasing these items after the season, I can usually score some pretty great deals and I am always prepared for the coming seasons.
Related:
What unexpected expenses tend to sneak up on you? How do you prepare for a surprising expense?
Check out some of our favorite personal finance resources:
Are you getting the best credit card rewards? Check out the top cash back credit card offers (updated daily)
Make extra money: 15 ways to make money from your computer
Get the First Chapter Free!
Join our online community and get the first chapter of the book Student Loan Solution absolutely FREE!
December was an off month for, not because we had to buy Christmas gifts (that was already done) but because of a large business expense. We’ll get the money back and we were planning on making a lump sum payment on our house payment as one of our 2018 goals.
But, thankfully we were diligent in saving the rest of the year. Two years ago, we couldn’t have made the same purchase. Thankfully, this was a “good expense” that we’ll see some value from.
That’s great that you are planning to get a return from a large business expense. Hope January has fewer unexpected expenses for you!
Always expect the unexpected!
The only truly unexpected expense I have in recent memory is car parts / repair. I work on my own cars, so the costs aren’t as expensive as taking it to a repair shop (labor is expensive!).
Non-monthly expenses (yearly, quarterly, etc) can be a bit of a pain, though. My wife has a million different savings account (ok, more like ten) that she puts money into for each irregular expense. It works out pretty well.
Car repairs are something I always anticipate, but always hate at the same time. We just spent $900 on my husband’s car this month. Of course it is kind of annoying to pay, but that’s why we keep an emergency car repair fund. Your wife and I sound the same. I also keep several savings accounts for each expense! It gives me peace of mind knowing that we are financially prepared for most situations, even if we have several unexpected expenses come up at once.