Life emergencies you probably haven’t budgeted for
Life can be full of twists. One day you’re cruising, the next you’re faced with empty toilet roll shelves at the supermarket. While some emergencies are easily overcome, others can be more of a challenge financially. Here are our top life emergencies you probably haven’t budgeted for and a few ways to tackle them head on.
Losing your job
Whether you’ve been busted dissing the boss on socials and got fired, or just become the latest victim of “corporate downsizing”, losing your job can be a shock to your finances. Unless you got a nice payout, mega-rich oldies, or been saving for a rainy day, money could get tight real quick without a job. You’ll have all the regular bills to pay, like rent, car payments, electricity, phone and internet, etc. And while you can probably survive without your fave streaming services, convincing your landlord to let you stay for nothing will be more of a challenge.
Taking precautions SHOULD BE everyone’s responsibility. Repeat, EVERYONE’S responsibility! But hey, we get that people can get caught up in the moment. So, should you and your partner see double lines on a pregnancy test, it’s important not to panic. For some, a bouncing bundle of joy can be a surprise or something that’s just come sooner than planned. Being unprepared financially for the growing list of baby-related expenses (nappies, doctor’s bills, baby furniture, etc..) and the loss of income to one of you makes it hard, but not impossible.
Surprise city move
Sometimes opportunities come out of nowhere that are just too good to refuse. A job in a new city or overseas can give you invaluable professional and personal experiences. Unless the company hiring is prepared to cough up for your relocation expenses, you could be faced with a few unplanned outlays. Whether it’s higher rent, a big chunk of bond money, or the expensive exercise of setting up a new place from scratch, relocating can feel like you’re watching your money literally walk out the door.
Unexpected pet expenses
Our ‘fur babies’ mean the world to us. But when they get sick or hurt badly, big vet bills can put added strain on your finances. Having pet insurance can reduce the size of some of those bills, but it can also be expensive if money is already tight. Pet insurance claim restrictions on the age/breed of your pet, as well as on pre-existing conditions mean your furry friend may not be covered for everything. Having a back-up money pool for emergencies can help.
Your car breaking down or being in an accident can not only take your wheels off the road, but also cause a huge dent to your finances. Again, car insurance may cover you for accidents depending on who’s at fault, but when it comes to breakdowns, things can get exxy real quick. Apart from the high costs of parts and labour, you may also have to fork out the extra cost of catching Ubers while your car’s getting fixed.
One day you’re living it up on the ski slopes having the time of your life, the next your leg’s in a cast for a few months. Unexpected medical bills (and time off work) can come when you least expect it. Being young, fit and healthy can make us feel invincible, yet accidents and sudden illness can hit almost anyone. And when we say hit, we mean your back pocket as well. Playing sport is a great way to maintain your fitness but it can also expose you more to injury. We get that health insurance is way down on your priorities list of things to spend your money on, but it can also save you bundles should anything happen. It can also give you money back on things that are great for your health, like massages, specs, and dental work – don’t forget that ‘wisdom teeth’ generally need removing in your mid to late twenties.
Sadly, nothing lasts forever. At some point in the near future, you’ll likely have to say ‘farewell’, ‘adieu’ and ‘sayonara’ to that faithful old washing machine or TV your folks gave you when you first moved out. It’s been a trusty and reliable flatmate in your share house life to date. And now it’s gone. Apart from the “emotional distress” caused by its demise, you’ll be faced with the high cost of replacing it. You could rent, buy pre-loved to save some dollars, or splurge on something new. Either way, it’s likely to create a decent bite out of your pay packet, unless you use credit or have an emergency savings fund on hand.
Planning for the unplanned
As you can see, life emergencies can come at you from every angle. However, the emotional and financial stress caused by these emergencies can easily be reduced with the creation of an emergency savings fund. Starting one is as easy as regularly saving a portion of your salary and keeping it out of reach in an interest earning savings account. Some accounts even offer ways to hide your savings to keep them out of sight.
Look for a savings account that offers bonus interest if you link it to a transaction account and meet the minimum deposit and transaction criteria. Using a savings top up feature can even help you save while you spend. Simply set an amount to be automatically transferred into your savings account from a linked transaction account every time you make a purchase – it’s like saving as you spend!
Setting an emergency savings goal amount will help keep you focussed. Your objective should be to save up at least 3-6 months’ worth of expenses. That way you should be covered for whatever life throws at you.
Of course, if don’t have an emergency fund ready when “disaster” strikes, you could also consider getting a personal loan to help you get by.