Three Unexpected Expenses Most People Ignore
While most people already know that they should establish an emergency fund to help cover unexpected expenses, one area where many people fall short in their planning is taking into account the wide range of unexpected expenses possible. Sure, we all know that accidents happen and you may get hit with unexpected repairs to your home or vehicle, but there are many other possibilities that tend to get overlooked. Here are three expenses that most people fail to consider, and plan for, but should.
Nobody wants to think about the possibility of being arrested and having to get bailed out of jail but the fact is that in 2006 the United States FBI estimated that there were 4,832.5 arrests per 100,000 inhabitants, or 4.8% of the population.
Whether the person arrested is you, a friend, or a loved one, sitting in jail is likely to cause more problems beyond the legal issue that gave rise to the arrest. The court system does not move as fast as the business world and it’s likely the person will have to stay in jail for several days, weeks or months before going to court, unless they are released on a bail bond. This can lead to loss of employment, unpaid bills and homelessness.
By being released on a bail bond you are able to avoid those possible pitfalls, but in order to secure that release you may have to pay several hundreds or thousands of dollars to a bondsman. Having money earmarked for a possible bail bond can help alleviate the effect an unexpected arrest can have on your life and your finances. Click here for more information on what you need to know about bail bonds.
Many of us take family vacations every year and we typically save for that expense throughout the year in order to do so. However, we fail to think about times when we may have to make an unplanned trip and incur possibly hefty expenses, often on short notice.
If a friend or family member becomes sick, or injured, or dies unexpectedly we may incur unexpected travel expenses that can include airfare, car rental, hotel stays, food and other incidental expenses. When these types of situations occur we are already under tremendous stress and not having the money necessary can only exacerbate the situation. Making sure you have money set aside to cover these expenses will help reduce the stress on everyone involved.
Most people fail to plan for unexpected medical expenses. I’m not talking about office visit co-payments, prescription costs, or even insurance premiums. According to the United States Centers for Disease Control, each year 12.7 million people learn they have cancer. And cancer is just one of many possible ailments that can eat up your emergency fund.
Even if you have medical insurance, chances are you’re still going to have to pay a substantial amount above and beyond what your insurance pays. If you don’t have enough funds set aside to help cover the out of pocket expenses then you or your loved one may not receive the necessary healthcare and you may be left in even more dire financial circumstances.
By properly planning for financial pitfalls, including unforeseen ones, you will be better able to handle these types of situations when they do occur.