How to Deal With Unexpected Family Expenses

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Raising a family is expensive and it's hard not to feel that even more around the festive season which is why you need a good budget in place. If you don’t track your spending and manage your money well, you could soon find yourself in financial trouble. But even the most frugal families can’t always be prepared for everything that life throws at you and I was recently in that situation where in the same month my car broke down, I badly chipped a tooth and then our boiler broke and needed replacing - I simply didn't have savings to cover all of these unforeseen costs. Family life is chaotic and there are always going to be times when unexpected things will happen so as what happened to me last month and whatever they are, you need to make sure that you can handle these situations so they do not land you in long term financial trouble. These are the best ways to deal with unexpected family expenses.

Build An Emergency Fund

The best way to protect yourself from money problems is to build an emergency fund. Each month, when you get paid, a little bit of money should go into a separate savings account that is just for emergencies. That way, you have a buffer in place so if you do suddenly get hit with a bill that you weren’t expecting, you can pay for it without affecting your normal budget. If you don’t already have an emergency fund, you should start building one right away. With so many new apps and choices, you can also set up a digital wallet (you can read more here about one such wallet) and explore the options of things like Bitcoin and other cryptocurrencies, which can help to generate some extra income, if this is something you are interested in.

 

Dip into your savings

If you already have an emergency fund or simple savings account it's always better to use the money you have already saved (even if it was for something else like a holiday) than borrow money with a higher interest rate to cover bills. 

My savings account doesn't incur any penalties to withdraw money but it's worth checking this beforehand as they idea is to keep any excess fees as low as possible.

Sell any of your unwanted stuff

If your looking to raise a smaller amount then it may be worth trying to sell some of your clutter and unwanted goods - you could be surprised how much you can make and have a clear-out at the same time. I've made around £600 from eBay this year by simply clearing out unwanted toys, homewares and clothes. 

Borrow The Money

If you don’t have an emergency fund, you may need to borrow the money to cover unexpected expenses, but you have to be careful about how you do it. I would recommend first talking to the family as this may be the most cost-efficient and flexible way to borrow money although having a proper agreement is also key. If you can't borrow from a family there are plenty of other options such as applying for a credit card with a zero percent interest period (usually 6 months to a year). This will help you to avoid any interest payments as long as you make sure to pay it back during the introductory period. 

Unfortunately, this might not be an option if you have a bad credit rating, so you will need to find alternatives. There are loans for poor credit available, but you will need to pay interest on them & extra fees will occur if these repayments cannot be made. Whenever you are taking out a loan, it’s important that you spend some time shopping around for the best deal, depending on your workplace some will be able to offer better and more tailored loans to your needs such as loans for nhs staff at better rates. 

As well as the interest rate, you need to consider any hidden charges, like early repayment fees. You need to consider your budget as well, and only borrow money that you can actually afford to pay back otherwise you will create even more financial stress. 

Find An Extra Income Source

If you are struggling to find the money to build an emergency fund and unexpected expenses are constantly throwing your budget off course, you should consider finding an extra income source. It can be difficult to get back into work after having kids, but finding part-time or even full-time work if your schedule allows it can really help to relieve the financial burden. If you are unable to get back into work because you have to look after your family, you can find alternative ways to earn money from home. There are more opportunities than ever for freelance work and remote jobs which you can fit around busy family life.

You never know when unexpected expenses will come up, so it’s important that you are always prepared for them.