Unexpected costs are an unfortunate fact of life. No matter how well you organise your budget, there is always the chance that you’ll find yourself facing an unexpected expense. Perhaps your washing machine breaks down, your car needs an expensive repair, or an unexpected tax bill arrives through your door – whatever the cause of the expense, one simple fact remains: you don’t currently have the funds set aside to pay.
The above scenario is undeniably disheartening; after all, you’ve done the work, read through www.moneysmart.gov.au for budgeting tips, and done all you can to keep your finances in good order – and now it seems like you’ll have to break your budget. However, there is a silver lining: there are three questions you can ask when facing a budget break in order to ensure the impact is as minimal as possible…
Question #1: “Do I have to meet this cost right now?”
Unexpected costs can often cause people to assume that the cost must be met, but not all such expenses are time-sensitive. For example, a small hole appearing in your wall is an eyesore, but it’s not something that has to be rectified immediately. It’s therefore always worth taking a calm moment to consider if you have time to save or set money aside to meet your unexpected cost, rather than assuming it must be dealt with immediately.
Question #2: “Do I need to pay this cost upfront?”
Almost all immediate upfront cost can be defrayed. If you have received an unexpected bill, you can always call the company and ask if they can take monthly payments rather than a lump sum. Similarly, if your washing machine breaks down, you can hire a machine from the likes of www.directappliancerentals.com.au rather than having to meet the full costs upfront. By spreading the payments over a longer period, you can rework your usual outgoings to ensure the cost is covered without actually having to break your entire budget.
Question #3: “How much money can I save?”
If you can’t spread the payments, and the cost needs to be paid immediately, then unfortunately, you might have to break your budget – but you can still lessen the impact of doing so by donning your bargain-hunting hat. For example, if your car needs unavoidable repairs, don’t accept the word of the mechanic who diagnosed the problem: call around for quotes and see if you can find a better price. Often, the stress of an unexpected cost can cause people to make snap or emotional decisions to try and get the matter resolved as quickly as possible – an understandable, but expensive, choice. Instead, give yourself the time to find the best possible price, as doing so allows you to get your budget back on track as quickly as possible.
Having to break your budget to meet an unexpected cost is never a pleasant experience, but by going through the questions above, you should be able to do so without sustaining too much harm to your finances.