How To Plan For Unexpected Expenses & Reasons Why

It’s just a matter of time before unexpected expenses happen.

The gearbox or transmission blows on your car right around the time your daughter needs braces and your washing machine decides to call it quits.

All of these are unexpected expenses and something we need to deal with throughout life.

Being prepared as much as you can is your best bet when live throws you a financial curve ball.

But firstly let’s remind ourselves of what expected expenses are.

Examples of expected expenses

When you are creating your budget the first thing you tend to look at is your fixed expenses and monthly or weekly bills.

These are easy to see and easy to plan for because they happen so regularly.

But there are other bills that you should expect even though they don’t happen every month.

Expenses including:

  • Yearly expenses like vehicle insurance
  • Quarterly and 1/2 yearly bills
  • Eyesight tests and new glasses (if you wear them like I do, then you know that you will need new glasses every couple of years)
  • Adhoc bills like membership payments
  • Routine car repair bills
  • Routine house maintenance costs

Routine car and home repair costs may not be predictable in terms of exactly what needs fixing but you can bet your bottom dollar that something will need fixing.

Therefore it’s not unexpected when a repair crops up is it?

Related posts:

How To Budget Your Money When You Don’t Know How

The Best Money Habits To Transform Your Wealth And Happiness

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5 Examples of true unexpected expenses

Pet Emergencies

As a responsible pet owner I would hope that you have insurance of some sort to cover unexpected illnesses and accidents that do happen to our fur babies.

Some people go the traditional route and pay for pet insurance.

Others forgo the insurance and saved a similar amount in to a savings account that they dip into when vet bills require paying.

Personally I have pet insurance for our cats.

I knew when we got the boys that there was a high chance that at some point in their lifetime they would need significant vetinary intervention.

And we certainly didn’t have the funds to pay a large bill at that point.

12 years later I was extremely pleased we had that insurance when one of the boys suddenly developed a terrible limp.

He had a defect in his kneecap that suddenly appeared and required immediate, complicated orthopedic surgery.

This was an unexpected expense in it’s truest form.

I had insurance so no need to pay, right?


Firstly, because his knee was dislocated he required immediate surgery.

And our insurance company has a 3 day turnaround to agree paying the vet surgery direct, rather than refunding me.

So we had to stump up the entire cost, to the tune of £3000 ($4000) – ouch!

Secondly, when you have mature pets (anything over 7), you not only pay the excess, you also have to pay a % of the remaining bill.

My insurance meant we paid 15% of the bill after paying our excess.

Our final bill was around £500 ($660).

And no, that wasn’t the only time we have claimed on the pet insurance, just the most expensive.

I claim approaching twice a year for his brother so I know insurance was the right choice!

He’s a fighting cat and showing no signs of hanging up his alpha male cat status no matter how much I wish he would!

And yes, he was ‘done’ at 6 months old, what can you do with a cat who must always be top cat in his territory?!

overhead shot showing woman and mans hands reviewing paperwork with credit cards and calculator surrounding them to signify unexpected expenses

Job losses

No-one expects to lose their job overnight. But it happens more often than you think.

Unexpected things happen in companies that are out of your control or even your knowing.

Companies get into difficulties, pandemics happen and within a few minutes you’ve got no job and no paycheck.

When companies go bust you don’t even have the luxury of knowledge that you’ve got your last paycheck coming.

Often this goes out the window along with the company.

You are forced to claim this from your government (depending on your country) or rely on welfare benefits.

Related post: How To Live On Less Money In Difficult Times

Major household bills

You know you need to set aside money for home maintenance but suddenly finding out you need a whole new roof fits the category of unexpected expense.

Unless you bought a cottage with an 80 year old thatched roof, then you know it’s well overdue for replacement!

We viewed such a cottage and ran a mile from that £25k cost!

Or your 5 year old boiler/furnace stops working and gets condemned by the repair engineer.

You wouldn’t be expecting to fund a replacement just yet would you?

Related posts:

15 Things We Gladly Gave Up To Become Mortgage Free

How To Pay Off Your Mortgage Early (So You Can Be Free)

pastel coloured houses to signify unexpected expenses

Major car repair bills

Regular maintenance and small repair bills are to be expected when you own a vehicle.

But when you get hit with a $1500 bill on your 3 year old car you can rightly feel a little aggrieved at the unexpected cost.

Cars are complicated bits of kit so when something goes wrong, especially with the electronics, you can expect a hefty bill

On a 10-15 year old car, it’s more expected.

A 1-4 year old car? Not so much.

Unplanned travel

When a family member died a few years ago, the only way to get there and back for the funeral within a reasonable time-frame for work and other commitments was to fly.

We could have driven the 10 hours (each way) and saved money.

But we didn’t have the time or energy to do that within a 2 day turnaround.

Unplanned travel, especially last minute travel, means you will pay a premium with little chance of finding a deal.

Air fares are great for finding a bargain price when you are looking 4 months ahead.

4 days ahead and it’s a different story.

It’s last minute and you can’t be flexible on days or times so you pay whatever the going rate is, through gritted teeth of course.

Unexpected and not cheap!

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How to deal with unexpected expenses

Do your best to anticipate upcoming expenses.

If you’re driving an older car, or your dishwasher has seen its better days, start saving up to replace the item.

You may also want to start keeping an eye out for good deals on the replacement.

An even better strategy is to have an emergency savings fund.

Set up a savings account and add to it monthly. Use it only for completely unexpected expenses.

Make sure you know what’s in the account.

And once you have to take money out of it replace it as quickly as possible.

This brings us to a good point.

Related post: How To Kickstart Your Rainy Day Fund When You Are Broke

How to pay for unexpected expenses

Here’s how to recover quickly after that purchase.

Go over your budget (you have one of those, right?) and look if you can temporarily cut back on some things.

Stop ordering pizza every Friday night and make your own at home.

Skip a night out on the town and watch a couple of movies on Netflix instead of going to the theater.

Use the money you’re not spending for the next few months to refill your emergency fund.

For an extra boost, work a few hours of overtime, do a few freelance projects or temporarily pick up a part time job to get back on track fast.

These posts will help you cut costs:

How To Radically (And Successfully) Cut Your Expenses

How To Survive, Thrive And Save Money On A Tight Budget

How To Cut Monthly Expenses: 35 Ways To Save Money

looking down on woman holding her head in her hands as she looks down at numerous credit cards and a notebook

How to handle unexpected expenses without backup

What do you do when the expense comes up before you had a chance to set up the emergency fund?

Because Murphy’s Law says that this will happen at some point.

Just because.

Firstly, take a deep breath and assess the situation.

Can you make do without the item for a little while?

Just long enough to scrape together the funds to repair or replace it.

If it’s the dishwasher, that’s easy. You can wash dishes by hand for a little while.

Yes, I know it’s a pain but really, it’s only 20-30 minutes a day.

If you haven’t got the money, you do have the time.

If it’s the fridge or the car you rely on to get you to work each day, that’s a different story.

Although the reality is you could do without a fridge too, just takes a re-organizing of what you eat.

If you need the item that broke, evaluate if it would be less expensive to repair than replace.

A $1500 car repair bill that keeps your car on the road for another 2 years is cheaper than a $15000 new car.

Even if it isn’t the perfect solution, it may get you to work until you can save up for a different car.

Shuffle your money around and if there is no other option charge it to the credit card and get to work.

And I do hate to say use your credit card but sometimes needs must.

woman using calculator while holding money notes

Recovering from an unexpected expense

Your one and only goal right now is to pay off that expense.

Depending on your budget, your income and the expense this could take a few weeks or many months.

Firstly look at your budget again and see where you can find some savings.

Needs must at this point because you really don’t want to be paying the 20% interest your credit card company is charging you.

Stick every penny of spare income you have onto that debt.

As before, go without Friday night pizza, skip going out on a regular basis.

It’s cheaper to pay for Netflix or another streaming service than to go to the movies even just once a month.

Once your bills and credit cards are paid off, do what you can to get that emergency fund set up.

Because you know something else will break down the road.

Murphy’s Law says it will.

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Last Updated on 28th August 2020 by Emma

About Emma

I'm here to help you become confident in making the best money decisions for you and your family. Frugal living has changed my life, let me help you change yours.

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