We all know we should have one, but do you? Emergency funds are meant to protect you against unexpected expenses. This means saving your funds so that you don’t have to put these unforeseen expenditures on your credit card or borrow it from a retirement account.
If you’ve been putting off starting an emergency fund, here’s ten unexpected situations that may force you into reevaluating your finances.
1.) Veterinarian Bill
Our pets are part of the family. When something happens we rush them to the vet and like it or not, you’ll have a large bill afterward.
2.) Damaged / Lost Phone
The average smartphone costs around $500. Even if you have insurance coverage through your carrier, the deductible can be close to $200.
3.) Tree Removal
Having trees near your home can give it curb appeal. However, when those trees start to get too big, it can cost a few hundred dollars to get them removed.
4.) Computer Crash
If it’s not frustrating enough when all your stuff is gone, wait until you price out the cost of a new computer.
5.) Car Repair
No amount of maintenance can prepare for every problem that could happen to your car. Sometimes parts fail and they can be costly. Without an emergency fund, you’ll be left putting that essential repair on your credit card.
6.) Friend’s Wedding
Weddings are a beautiful time, but they can get costly on the wallet. Traveling expenses, wedding presents, clothes to wear, and more necessities can add up.
7.) You Owe Taxes
We try to make sure that our employer takes out the right amount, but sometimes we end up owing money. If you’re not prepared, you may end up not owing just tax money, but late fees as well.
8.) Lost Luggage
No one ever wants to think about their luggage getting lost on the way to their vacation destination. But, it happens. Without your stuff, you will need to pay for the essentials until your bag is returned.
9.) ER Visit
Without insurance, you can expect to pay a few thousand before leaving the ER. Even with insurance, your deductible could be close to $1,000.
10.) Woops Baby
If you already have kids, we probably don’t need to tell you how expensive they can be. Paying for more food, diapers, bottles, formula, and other expenses can take a toll on your finances.