Life is all about the unexpected. Can we really plan for everything that will happen? The short answer is no — because life tends to happen to us while we are making said plans!
However, there are ways in which we can tackle life’s most unexpected financial events and precautions we can take, such as insurance. Whether it’s major medical bills, you’re involved in a car accident, or your home floods, this is real life, and while you can’t always prepare for it, it’s important to be aware of what could go awry.
This blog is your reality check.
What Does an Unexpected Expense Look Like?
Most adults are well-accustomed to the monthly expenses they have to pay. Sure, there are some bills you don’t have to pay every week or month, but it’s important to mention that even these bills don’t count as ”unexpected”. This is because you’re probably already aware you have to pay them but sometimes, they tend to creep on you. For example:
- Your quarterly property taxes
- Water or sewer bills
- Your auto insurance premium — which you pay every 6 or 12 months
- A yearly dental checkup or eye exam
These types of expenses are predictable, even if some of us forget to budget for them or make a note of what’s coming up. Or, maybe you’re more organized than that and you set money aside for these expenses each month. Either way, they’re not out of the ordinary.
But when it comes to a truly unexpected expense, this is something you could have never foreseen. A basic example is a flash flood that ruins the bottom level of your home and the resulting water damage restoration expense. In short, these are the types of expenses that could take place at any time, but you’re never 100 percent sure they will.
Financial Events You Never Saw Coming: Medical Emergencies
Most medical-related costs are expenses you can somehow fit into your budget. They include routine checkups, appointments when you’re ill, collecting prescriptions, etc. These are normal medical expenses that most people deal with on a regular basis.
However, there are certain medical emergencies that take place that you could have never planned for. In some cases, it could be a burst appendix. You could be involved in a car accident and break a few bones, or maybe a loved one is diagnosed with a life-threatening condition.
These are the types of medical emergencies that many of us rarely plan for — especially if you don’t have medical insurance. In fact, research shows that as many as 32.8 million people under the age of 65 in the U.S. do not have medical insurance coverage.
If you have to visit the emergency room, this could cost you anywhere from $150-$3,000 if you do not have insurance. This is just for the ER visit, it does not include hospitals stays, medication, tests, lab fees, specialist consultations, etc.
So, in short, one of the best ways to prepare for an unexpected medical emergency is to take out basic medical insurance coverage. Would you rather pay a $300 monthly fee for insurance, or face a hospital bill worth thousands of dollars?
If you own a pet (or two), it should come as no surprise that while they are cute and cuddly, they come with their own expenses. This is where unexpected veterinary costs come in. For many pet owners, it’s difficult to keep tabs on your animal at all hours of the day.
It’s also difficult to pick up when your pet has eaten something unusual or to fully understand why they’re acting strange, or breathing weirdly. Naturally, your first instinct is to rush them to the vet. And if it’s an out-of-hours veterinary call, this is going to cost you even more.
Pet medical emergencies can set you back a fair penny, too. For instance, pet poisoning can cost as much as $6,000, depending on the type of poison they’ve ingested and the extent of treatment. Injuries such as being hit by a car can add up to as much as $8,000, depending on the extent of injuries.
There are simple ways to avoid these types of costs though. It’s important to spay your female pets, learn about poisonous materials for your pets and keep them out of reach, where possible. You can also keep smaller pets indoors when you’re out of the house or on a leash to protect them from cars and other animals.
It’s also important to take your pet for regular vet checkups to ensure their health is in good condition.
Pricey Home Repairs and Restoration
It’s no secret that a home is something that’s always going to cost you money. Whether it’s some type of maintenance, a minor repair, a home renovation project, or your insurance fees.
For homeowners, it’s always a good idea to set aside about 1 percent of your home’s purchase price, each year. You can then access this kitty of money for these home-related costs throughout the year. However, this fund is not always foolproof, as some years you might have minor repairs, and some years everything seems to break down at the same time!
Just some of the most basic home-related repair and upgrade costs include:
- Basic electrical repair work, setting you back anywhere from $500-$2,000
- Replacing your furnace, which can cost $2,500 or more
- Replacing an air-conditioning unit, which can cost up to $3,700 or more
- Repairing or replacing your roof, costing you anywhere from $5,000-$9,000
- Upgrading your exterior siding, costing you $4,900 or more
Then there’s also the unexpected costs of home disaster, such as flooding, damage from major storms, house fires, or even a burst pipe in your ceiling or behind a wall. All of which can cost you thousands of dollars you had not budgeted for.
The best way to overcome these types of costs is to ensure you have adequate home insurance coverage. It’s also a good idea to take out home contents insurance which protects the items inside your home, such as appliances, furniture, carpeting, etc.
You can also avoid expensive repair jobs by staying on top of your home maintenance tasks each quarter. If you notice a small problem, take the time to repair it before it turns into a major issue you can’t afford.
Car Accidents and Auto Repairs
No one can predict when and if they’ll ever be a victim of a car accident and have to deal with costly auto repairs. But the reality is that if you own a car, you can expect to spend a good chunk of change each year to keep it in top condition.
As mentioned earlier, these costs are predictable. You know that they’re something you have to budget for. But what you can’t predict is the cost of an auto accident. Not only do you have to deal with personal medical costs, but the expense of potentially towing your car, then having it repaired.
As of 2021, the average cost to repair a car after an accident is now $4,000. If you don’t have car insurance, this is a pretty hefty bill to foot. There are also unexpected repair costs that can crop up if you neglect to maintain your car over the years. Some of the most common include:
- Radiator repair or replacement
- Bumper repair or replacement
- Repair or replacement of the timing belt
- Brake pad replacement
- Repair of the windshield
- Transmission repair or replacement
While some of these items cost a few hundred dollars, some of them can set you back thousands, if you include the cost of labor, too. So, how can you avoid these unexpected costs? It’s simple — make sure you have adequate car insurance. It’s also a good idea to keep your car in good condition, i.e. don’t put off your yearly car maintenance.
Pest Control Costs
Any homeowner will tell you that it’s a dreaded feeling when you uncover a pest problem inside your home. Not only does it give you the creeps to know these unwanted guests have invaded your home. But there’s also the cost of dealing with it, too.
If you own your home, the cost of pest control falls squarely on your shoulders. There’s no landlord to call to sort out the issue — and front the bill. Some of the most common pest problems include ants, spiders, mice, termites, cockroaches, and bed bugs.
In many cases, you can avoid the issue of pest invasion and the cost to eliminate these unwanted guests. With regular home maintenance, you can keep your thumb on the pulse of what your home needs in terms of cleanliness. If not, you could face hundreds, if not thousands of dollars in pest control fees.
Purchasing Additional Insurance
Buying a home comes with a number of associated costs, but one of the most obvious and important is homeowner’s insurance. However, if you plan on moving in the future, you should be aware of the costs of additional insurance or how your homeowner’s insurance costs could change.
A lot of this has to do with the area you purchase in, as well as the type of home you buy. For example, if you purchase a home that sits in a flood, earthquake, or tsunami zone, you can expect your home insurance premiums to increase significantly.
You can prepare for this cost to an extent by researching your options with regards to insurance policies before you sign on the dotted line. The same goes for buying an older home with outdated plumbing, heating, and electrical work. You will need to pay more for home insurance to cover the cost of any potential repair work or damage.
Make Knowledge Your Power
It’s difficult to predict when and if these types of financial events will affect you in your lifetime. But with good insurance coverage, some preventative maintenance, and consistent saving, you can secure yourself a decent safety net.
When it comes to preparing for the worst life has to offer, knowledge is key. To grow your general knowledge on topics such as tech, travel, lifestyle, how-to’s, health, business, and more, explore the rest of this site!