You never know what life is going to throw at you, and for that reason, you can save yourself a lot of stress and financial trouble by being prepared through savings. Here are eight common emergencies for which to start saving.
1. Medical Expenses
One can never expect an accident or illness, and unfortunately the costs associated with them can add up quickly. Even if you have health insurance, out of pocket expenses can be tough to deal with if you aren't prepared. An emergency fund specifically for medical emergencies can help you ensure that health issues don't become unbearable financial issues as well.
2. Losing a Job
We live in uncertain times, and you never know when your job might be in jeopardy whether from economic strains or other reasons. This is obviously a major blow to your financial situation, at least until you are able to find work again. The more you can set aside while things are good, the better you'll be able to deal with this setback.
3. Car Problems
If you have one or more vehicles, you'll have to pay to maintain them, and that can sometimes mean unexpected repairs.
According to AAA:
- A new car battery can run $75–$250
- An alternator can cost $500–$1,000
- A new catalytic convertor averages
- $1,000–$1,500
- A timing belt can cost $365–$585
- A transmission may cost $4,000–$5,000, or more
"Estimating car repairs becomes more difficult when issues surface unexpectedly," says AAA.* "But proper budgeting and creating an emergency fund can give you the financial means to get through some of these more challenging and unexpected repairs with less stress and greater confidence."
4. Home Repairs
Home maintenance can get expensive, especially when you need to repair an issue you hadn't anticipated. Budgeting and saving for these emergencies can remove a lot of stress when issues arise.
"When deciding how much to set aside, think about the size and location of your home as well as the age of your property," says Dawn Papandrea at Investopedia.** "If you have an older home in an expensive city that’s prone to extreme weather, you’ll need to save more than someone in a newly built home with a brand-new structure, systems, and appliances, or who lives in a less expensive location with a moderate climate."
5. Death of a Loved One
Nobody wants to think about the unexpected death of a loved one, but it does happen, and can become a financial burden in addition to an emotional one if you aren't financially prepared. You may face funeral costs, travel expenses, legal fees, and even unsettled debts. These things shouldn't be ignored when growing an emergency fund.
6. Appliance Replacements
Appliances break down all the time, and whether you decide to pay for repairs or replacements, the unexpected expenses can be inconvenient. Both repairs and replacements can be costly, and if you don't have enough savings to cover them, you might have to take on new debt, which may be a burden itself.
7. Unexpected Travel
There are plenty of reasons you might need to travel unexpectedly, and as you know, travel costs can add up, especially if you'll be out of town for an
extended period of time or if you have far to go. You might have to leave for a
family emergency, a funeral, a job interview, to assist a friend or family
member, or for any other reasons. You'll have to factor in the cost of fuel or
airfare, car rental, food, room and board, and possibly time you'll be missing
from work if you aren't able to use paid time off.
8. Pet Emergencies
Just as with humans, pets can also fall victim to unexpected illnesses or accidents, and depending on the severity of them, the costs for keeping your pet healthy can add up. This is especially true when surgeries are required. It's a good idea to have money set aside for pet emergencies the same as you would for yourself and the rest of your family.
Life is unpredictable, so the better you can prepare for the unexpected, the better off you'll be when an emergency comes up. Check out Nevada State Bank's savings account options to stay prepared.
* https://living.acg.aaa.com/auto/how-much-to-budget-for-car-repairs
** https://www.investopedia.com/home-maintenance-budget-8608913