As much as we’d love to be able to predict the future, we all know that, unfortunately, it’s never going to happen. Life always seems to find a way to surprise us; sometimes they’re nice surprises and other times…not so much. Quite often these not so nice surprises can come with a financial sting too, which can make everything so much harder to deal with if you’re not ready for them. So, whether it’s as inconvenient as having a broken boiler or a large vet bill, or as overwhelming as losing a loved one and having to organise funeral directors, here are some top tips on how to prepare for life’s unexpected costs.
Start saving early
One of the best things you can do is start saving your money as early as possible and having an emergency fund at the ready for if you ever need it. If you can, try and have at least £1,000 put to one side for when you absolutely have to use it. The earlier you start saving, the more interest you can earn on an account too, so that’ll be better for you in the long run if it’s left untouched.
Learn to budget
We all know how tempting it can be to get paid and instantly go on a big spending spree. The argument is ‘you can’t take it with you’, but what about if you reach a point where you definitely need it? Set up an income and outgoings spreadsheet and figure out exactly how much money you need to live each month. Allow yourself a little extra spending money to get by, but then put the rest into your savings. Future you will thank you for learning to budget properly now.
Obviously, life insurance and health insurance are so important to have, in case of anything really unexpected leaving you or your loved ones in financial difficulty. However, it’s worth getting insured for all those other things you hear about too, no matter how unnecessary you feel they may be. Travel insurance, pet insurance, building and contents insurance; not having them could leave you seriously out of pocket if an unfortunate incident should occur. Always expect the unexpected.
This might sound simple, but are you able to find the details of all your insurance policies, should you need them? Do you know where the warranty is for your new washing machine that’s just broken? Do you keep all your paperwork, receipts and banking information in order? There’s nothing worse than being unprepared when something urgent crops up, knowing that you have the information you need to save yourself some money, but not being able to find it.
Stay on top of things
Similar to above, it pays to keep on top of things around your home. If you notice a wobbly fence post, a leaking pipe in the house or a funny noise coming from your car, get it checked out sooner rather than later. Continual, low-cost maintenance will work out better for you in the long run, as it’s a lot cheaper than paying for emergency work to be carried out on something when it’s beyond repair.
Failing all of the above, if you still find yourself in financial difficulty, know exactly who you can turn to in times of need, be it a family member or close friend.