It’s easy to get caught up in the clockwork of recurring bills and payments. Each month many budget for rent/mortgage, utilities, monthly insurances and internet and phone plans, but unexpected expenses are often unaccounted for.
Whether it’s an ATM fee, a birthday present, or an electrical repair, the most miniscule extra costs can still put a household budget out of whack, forcing many people to draw down from their “special savings account”.
Everyone could benefit from an unexpected expensive purpose savings account – even if you’re someone who lives pay check to pay check, the smallest amount can help soften the blow of a major expense. Here’s a look at six expenses you may not be planning for, but probably should.
Birthdays and Gifts
When you’re a part of a large family or friendship circle, it can feel like birthdays are being celebrated every other week. Money can tend to get tight, especially if gifts and celebratory outings are a requirement.
While buying presents for certain relatives is unavoidable, many families opt for a “kids presents only” rule. Alternatively, curbing overspending on presents can be as simple as suggesting that everyone pitch in for one special present – perhaps a big ticket item the person has always wanted.
A dinner with friends and family can easily set you back $80, and it’s made worse when everyone decides to split the bill – especially when you’ve only had the soup special! Going out for meals can be expensive, and while it’s not recommended becoming a hermit to avoid paying rich prices; you can take back some control over where you eat and how often you go out. If heading out for dinner with friends, be mindful of everyone’s budget and pick a place all can afford.
New car tyres, a faulty appliance, broken mobile screen: these incidents happen often and are likely to take you by surprise. They’re usually the things you need the most and the ones you’re desperate to fix to prevent further hazard. Besides setting aside a small amount to repair costs each week, you can take preventative measures to ensuring a minor problem doesn’t become a larger one. For example, cleaning the leaves out of your drains can help to prevent fires, and broken or leaky pipes.
Miscellaneous Travel Expenses
Planned travel is an expense many Australian’s get behind, and we often take surprise costs as part of the territory. Even the well-travelled can fall victim to hidden fees and an untimely low exchange rate. While it’s nice to feel spontaneous when travelling, it’s crucial to research the costs you’re likely to come up against. For example, it might be cheaper to purchase train rides online rather than in person. If you’re not one to meticulously plan every detail, be sure to budget in more than you expect to spend on your trip.
Do you have last minute house guests arriving for the weekend? Extra people usually equals more water consumption, double supermarket budgets, and increased electricity. While you won’t notice the electricity and water consumption too much, the immediate impact can be seen with food and beverage costs – which for the budget conscious shopper can place a bit of strain on the weekly allowance. Having a small amount allocated for extra plates in your household could diminish any stress on household expenditure.
Redundancy and Job Loss
There’s no two ways about it: Losing your job or being unable to work is hard. Regardless of whether you’ve been made redundant, fired, or been in an accident which prevents regular work, the loss of income can be incredibly challenging for families and couples alike. A financial nest egg could be a viable option to manage every day expenses while searching for another job. But if you’ve found yourself out of work temporarily due to a medical incident, you could look into Income Protection insurance which can supplement up to 75% of your income (depending on your policy) until you are able to return into your job.
No one can prepare for every financial hit; that’s a fact we all have to live with. A little contribution each pay packet into a separate account could be a solution to dealing with untimely (and large) expenses.