It can happen to the best of us; one minute everything’s going about as well as we could hope for, our books are balanced and it’s smooth sailing ahead.
And then some surprise expense leaps out from the shadows, completely obliterates our peace of mind, and sends us scrambling to rally our resources and try to avert a complete financial catastrophe.
It’s a fact of life that things just do go wrong from time to time, and unforeseen expenses are going to occur at random intervals. There are things we can do to help stave off some of the uncertainty.
Reading a good SSP guide, for example, can help us get a better sense of our sick pay entitlement at work if we’re suddenly struck by a medical condition out of the blue. If you’re self-employed, you don’t have that luxury.
As a rule, however, it’s best to accept that those nasty surprise expenses are a fact of life and to take adequate steps to protect yourself from them.
Here are some tips for doing just that:
Budget for the unforeseen
By definition, you can’t know the unknown, so it’s not realistic to assume that you’ll also see an expense coming before it arrives.
What you can do, however, is to assume that unexpected expenses are always on the way, and to budget for the unforeseen continually, by setting aside a bit of money each month for “emergency funds”, or “unexpected expenses”.
That way, if you have to get a new boiler at short notice, you at least won’t be left with your head in your hands wondering whether to cancel your child’s birthday celebration or sell some of your belongings to cover the costs.
Make a note and set reminders for all recurring payments
Many of the unforeseen expenses that we encounter in life are only really “unforeseen” because we’ve forgotten about them.
This is typically the case with digital subscription services, which bill annually or quarterly. Since money isn’t leaving our account each month for the service in question, we put it out of our minds.
Make a note of any recurring payments and subscriptions, and set reminders for them. Be sure to budget appropriately for those expenses before they arrive.
Have a budgeting system
Try a free money management app that helps you track your spending, set budgets, cut your bills, and control your finances.
Snoop can connect to your bank accounts and credit cards to show all your information in one place. It can save you money on your household bills by tracking who’s taking your money to check you’re not overpaying your bills. You’ll get access to special offers and exclusive deals to help cut your costs.
Snoop also provides personalised spend analysis to help you track your spending by category or merchant. You can create budgets for your monthly spending and each spending category.
Snoop will find clever ways for you to save money at the places you already spend. It will highlight anything that needs your attention, from daily account balances to bill increases – and can even warn you when your bills may not be covered. Snoop uses super-secure tech – developed in partnership with your bank – to connect your accounts.
In the face of unexpected expenses, it’s vital to be prepared. Allocate a monthly emergency fund, set reminders for recurring payments, and consider using money management apps like Snoop. These simple steps can help you stay financially resilient when life throws unexpected challenges your way.