If the money that you earn is just enough to cover the bills, you might find yourself in a bind when something you haven’t budgeted for happens.
That’s why money expert Clark Howard recommends that everyone have an “oops fund” ready in case you are met with unexpected expenses.
Let’s take a look at some things that could happen to anyone and how much they could cost you out of pocket if they should happen to you.
Here are some unexpected expenses you should be planning for
If any of these unfortunate events happen to you, you might have to pay — quickly — to get them fixed. Even with insurance, there is almost always at least a deductible to be met.
Here are some small emergencies that can break the bank if you haven’t budgeted for them
|A tree in your yard dies and is threatening your roof||Average: $600-$1,500|
|Pet requires surgery||Average: $1000 and up|
|Washer / dryer breaks||Average: $200-$700|
|Cracked windshield on auto||Average: $185 to $1,000|
|Water heater goes out||Average: $240 to $576|
|Child gets sick and needs day care||Average: $232 per week per child|
|Cell phone dies or is lost||Average: $537|
|ER visit||Average: $150 to $3,000|
|Car accident||Average: $7,500|
Of course, there are many more. But as you can see, unexpected expenses can add up quickly.
When it comes to dealing with unexpected expenses, money expert Clark Howard says the key is to practice something we should be doing anyway: Saving.
Clark’s solution: Build an ‘oops fund’
“If you don’t have savings then you’re not prepared for the ‘oops’ in life,” Clark says. “Because ‘oops’ happen — all different types and sizes, and a lot of times we’re not in a position to deal with them.”
Clark says the numbers show that if you’re not saving — even a small amount — the risk of financial ruin is much higher.
“Surveys show, no matter how the question is asked, that roughly half of Americans cannot handle a simple financial hiccup in their lives — some part of our car breaks, or something in your home needs repairing or replacing or whatever it is that’s a surprise — you don’t have anything to draw on,” he says. “That’s why having savings in an oops fund or emergency fund is so important.”