Stuff happens. That’s just the way it goes with life sometimes, and correspondingly with unexpected expenses.
Now, many people are able to put money away for a “rainy day”, so to speak. As I write about here, it’s important to:
- Focus on making money
- Live within your means, and spend less than you make
- Invest the difference
- Manage risks
These four steps also bring about four important money questions, as I wrote about recently. If we make sure to answer those questions listed in that prior post, and do it periodically, it can help keep us on track to build our nest egg.
That being said, it seems like many of us simply have to start somewhere, and that might mean having very little money or room for error. This could be when just starting out, or it could be later in life after setbacks. Whatever the case, it’s not uncommon for people to have very little money in an emergency fund for unplanned expenses.
Actually, this has been shown to be the case. In one study, a significant percentage of people couldn’t take care of an unplanned $2,000 within a month. That might not seem like it’s even possible for many people, but there are plenty of folks out there that are clearly in that circumstance. Everybody has a different life and financial situation.
Clearly, there are times when you need cash now and cannot wait. In those cases, it just might be worthwhile to try to find alternate sources of money. After all, when there isn’t much money on hand, unexpected expenses can put people in a bind at times.
Some examples of such unexpected expenses might include:
- A car accident, with high out of pocket expenses for damages
- Auto repairs, which might not be due to an accident but still cost a lot and aren’t covered by insurance
- A medical situation, due to an unexpected illness or long-term problem
- Emergency dental work, that could cost a significant amount of money to take care of
- Losing a job, which might put someone in a short-term bind until they at least get unemployment money or – even better, of course – another job
- Natural disasters. Yes, that might sound a bit odd at first, but we have seen bad weather cause all kinds of problems for people.
The list could go on and on, regarding why people need money on short notice. Best not to be surprised, and to plan on expecting the unexpected – no matter how convoluted that might seem. After all, as we said at the beginning, stuff happens!
My Questions for You
Have you ever been impacted by a totally unplanned yet significant expense?
Do you think that we should simply plan for some level of unexpected, random expenses?