Forgotten Situations You Must Budget For

Unexpected occurrences and events are part of life.  Certain circumstances can place you in a fiscal bind, but when you administer financial strategies ahead of time, you’re far more likely to stabilize yourself.

Some are modest situations like a rise in grocery prices that we can attack with coupons, or stretch food by altering some dinnertime meals. We take care to implement these savings strategies and go on our merry way.

Others involve a little more effort and money like an increase in your homeowner’s insurance. Shopping around for new coverage could save some cash, and you’re relieved to know you have options.

But when it comes to substantial financial circumstances that could blindside you and can cause consequential effects on your financial picture, preparing ahead of time and budgeting appropriately won’t send you into a spiral of financial despair.

Don’t get caught off guard! Budget for unexpected life situations.

Unexpected life situations can cover your pocketbook in red, but when you prepare yourself for significant occurrences, you will be able to keep your financial bearings. Here’s a list of concerns to budget for that will allow you to put your worries at ease.

Medical

Healthcare costs can be astronomical. When you figure insurance premiums, co-pays, deductibles, uncovered out-of-pocket expenses, and prescriptions, the effects can be detrimental. Add to that any unforeseen surgery needs, possible missed work, dental work, tests, procedures, and accidents, and you could have a recipe for disaster in no time.

Even before unexpected medical costs occur, there are steps you can take to combat them.

Make sure your practitioner along with any specialists, hospitals, urgent cares, and emergency rooms are in-network before using them.

You can ask for a discount….really.  It’s a little-known fact, but discounts are possible in some cases.

Medical bills can be negotiable to a certain extent.  Always get an itemized bill, not just an overall statement.  The bill gives information about every single charge, and you’re able to see what you’re paying for precisely.

Know what codes will be used by the practitioner and location first and then check with your insurance company to get coverage specifics.  These codes can be the ticket to finding out exact coverage information.

See if the doctor’s office can do a re-code.  These codes are numbers indicating the classification of medical diagnosis, procedures, services, and equipment that determine a claim.  Medical billing errors do occur so it could benefit you to question a code and even ask to have it changed.

With prescriptions, asking questions is also crucial.  Check to see if a generic drug can substitute for a brand name, ask what tier the Rx is, find out what the out-of-pocket cost would be (sometimes it’s cheaper than using your insurance plan) or try https://www.goodrx.com which collects and compares prices and discounts from 60,000+ U.S. pharmacies.

If you do find yourself hit with a significant medical cost, talk to the provider billing departments.  Interest-free payment plans are often available to assist with financial strain.

Unexpected Expenses

Vehicle

You never expect that your 16-year old son will total his car less than two months after driving, do you?  Well, he did.  Now you’re stuck with a jump in insurance costs.

Your car starts leaking transmission fluid, the brake pads and rotors need replacing…..  it all comes with the territory of owning a car.  As they age, maintenance can get more and more costly.

Things like these happen.  And while unforeseen accidents and maintenance seem to strike you with complete surprise, having budgeted for certain predicaments can help buffer the costs associated with them.

Home Repair & Maintenance

If you’re a homeowner, you know that acts of God can wreak havoc on your home.  Shingles get torn off, basements flood or a tree falls on your porch due to a lightning strike.

Homeowners insurance a must but there are certain situations where insurance simply won’t provide coverage.

When it comes to maintenance, remember that things don’t last forever.  Retaining walls can erode in time, appliances can give out long before you expect them to and water lines can leak.

Creating and implementing a household budget will help you stay on top of expenses even if the worst happens.

Kids

You have them; you understand.  Children are expensive.  Daycare costs can be astronomical, sports activities and team fees are outrageous, driver’s education, car insurance, college…..it seems the list not only never ends but also gets increasingly expensive as time goes on.

It’s easy for most parents to go overboard on spending when it comes to their children, but be realistic when it comes to what you can and can’t afford.  Early in life, children don’t truly need much other than your time, attention and love.  Forgoing an onslaught of toys will help their greed factor as they grow.

Once they begin participating in extracurricular activities, talk with them to make sure their desires come from the heart.  Do they love soccer or are they doing it because they feel Dad wants them to participate?  Are they joining the cheer team because their best friend is going to as well?  Urge them to make wise choices based on what they truly want.

If you’re able to save for college, a 529 plan is something you might want to look into.  Remember, though, that building your own financial security is far more critical for the long term.  You don’t want to place yourself in financial ruins just so your kid can enjoy a free ride to college.

Essential Things To Budget For

Loss of Employment

Layoffs, cut-backs or being fired often come without warning.  Loss of employment can really turn your world upside down.  There’s never a guarantee on how long securing a new job will take.

Padding your savings with six to eight months of living expenses is commonly advised.  Adding that buffer to your finances allow you to pay for necessities like rent or mortgage, food, and other monthly bills.

Death

It’s not a favorite topic to be sure, but it’s an essential one to address and plan for.  A funeral will likely be one of the single most substantial expenses you will endure in a lifetime.  While it may be an uncomfortable subject to broach, making arrangements ahead of time and sharing your wishes with family and loved ones will ease the stress of the inevitable.

There’s a multitude of decisions you can make to plan your own funeral that will ease the burden to your family when you do pass.  Strong emotions tend to crop up when a loved one dies so detailed plans put in place ahead of time spares the survivors from having to make decisions under pressure.

Make sure to document your wishes in writing separate from your will.  Give copies to family members and your attorney making sure your preferences are readily available at all times.

Have life insurance!  Leaving the massive cost of a funeral to your survivors could be detrimental to their financial situation.  At its most basic, life insurance will provide coverage of any outstanding debts upon death, taxes, and funeral expenses.

By planning and budgeting for situations you don’t necessarily expect, you’re positioning yourself to stay on top of your finances.  Overlooked scenarios and life events won’t take you by surprise when you initiate necessary strategies that might otherwise cause you to lose your financial footing.

 

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