Times are getting more brutal, and research shows that many Americans don’t have enough savings to fall back on. A recent study on the financial readiness of Americans discovered 51 percent of families only have emergency savings less than 3-month’s-worth of expenses.
Although a safety net that could cover your expenses for three months may seem adequate if you are suddenly unemployed, all these savings can disappear in the face of a high cost.
Unless you want to be pushed over into debt or even bankruptcy, you need to understand what sort of expenses may be lurking around the horizon so you can better prepare for them.
Below is a list of some of the most expensive emergencies you could run into.
1. Legal Trouble
There is an adage that says the law is complex, but it is the law. Whether you mean to, you could suddenly find yourself facing legal repercussions and seeking help from bail bonds companies.
Sometimes legal trouble can stem from not paying attention to what you are doing. For example, you could accidentally park in the wrong spot and have your car towed, or you could drop a scrap of paper and be fined for littering. Awareness and vigilance are your best methods for ensuring you don’t have to shell out money due to a ticket.
Late fees and penalties are another way you could suddenly face ballooning legal payments. Sure, ignoring one parking ticket is done, but when you accumulate too many unpaid fines, you deal with an even more enormous expense or even face jail time.
2. Medical Emergencies
Aside from legal troubles, the most common reason people may be facing debt is because of medical emergencies. With the state of healthcare finances in the country, it’s possible to be pushed into bankruptcy by a single hospitalization.
Prolonged hospitalization and surgeries are vastly more financially ruinous, especially for families already living on a budget. For example, according to health management experts, the average visit to an emergency room, which requires no room and board and limited consultation with specialists, would cost you approximately $1,000. For this reason, you and your family must obey health guidelines, specifically those related to preventing the further spread of the virus.
Regular doctor’s appointments should also be encouraged, at least once every six months ideally. This will ensure you are on top of your conditions instead of suddenly surprised by them during an emergency room visit.
Although the divorce rates in the United States are no longer as distressingly high as they were a few decades ago, many married couples still undergo the stressful and financially tricky procedure. The cost of a divorce proceeding varies on the nature of the divorce, the assets involved, and any arrangements regarding the children.
Lawyer’s fees are sometimes the most costly of all since they must be paid based on how much time they spend on your case, and the longer the divorce goes on, the more you have to pay them. Naturally, most couples try to resolve their differences to end their marriage as soon as possible. If this is not an option, perhaps you can explore other avenues for settling your differences.
Mediation could be advisable if you argue oversplits in property and finances but don’t want to drag the whole mess into court.
4. Automobile Expenses
A car can be a handy device and may even be a source of revenue. However, they can also be extremely costly, both in maintenance and during an emergency.
First, keeping a car fully fueled is a costly matter, not helped by rising gasoline prices. Second, because a vehicle is a conglomeration of complicated machinery, ensuring all of it is operational entails a steep maintenance cost. That’s not including paying for the car itself, which could cost hundreds every month, to the insurance premiums necessary to drive them around comfortably.
Without these necessary costs, you should still be aware of common damages that could impair your vehicle. Rear-end collisions, windshield cracking, and similar events could cost hundreds of dollars to repair and stop you from using your vehicle.
Being aware of what significant expenses you should be prepared for is only the first step to minimizing the damage these events could bring. Financial savvy and frugality are among your best tools in building up your savings account, so it can take such blows and not leave you or your family in the lurch.