Unforseen Expenses - How do you deal with them?

mullymessiah

Just wondering as the title says how do people cope financially with unforseen expenses. for three months this year ours has been with cars. I regularly review my expenses so don't feel a need to post a SOA as we come out with approx £600 per month after everything is taken out etc. But what do you do if you have to pay out a large amount during the month and you haven't the money? do you put a small amount to one side each month even though you may need it? Currently bank of mum and dad are keeping us afloat but we don't feel to be progrssing even though we are saving more each month by shopping around and generating income from other sources. I've been racking me brains but I'm at a bit of a stadstill. Apologies if this isn't a constructive post but I got to the end of my original post then it vanished!!!

Thanks

MM

urg123

Hi,

You've pretty much answered your question.

The SOA allows for you to put a little aside for an emergency fund. It's really useful to have a sum in a savings account that acts as a buffer. My SOA allows me to put aside £50 per month and over time I have been able to put about 500 in the pot. That covers the boiler bursting or the roof caving in. Many of us have had these conversations with ourselves and on this board and it feels wrong to have money in savings when you are working hard to pay off debt, but having a buffer helps you to be able to manage without resorting to the dreaded CCs or the bank of M&D. Anything over what you think is a useful buffer can then go towards the debt.

Hope this is useful

urg x x

goingforward_3

Well i ebay everything and anything that isnt used / been outgrown etc and that money stays in my paypal account. I rarely buy from ebay so any money i do make just stays in my paypal account until i need it. Then if i get a car expense for example i transfer that amount to my bank account. I dont transfer when i sell something as the money would just get wasted.

This month so far i've made nearly £300 by ebay old wii games, kids clothes and stuff we no longer needed.

DarkConvict

Well you can only do your best to budget for it, i.e. keep £360 saved per year for such problems. The issue comes if you get a £200 issue in month 1 with only £30 saved. In which case you are a bit stuffed.

When this happens its down to relying on friends/family or selling old items via places like ebay. Thats the problem with unexpected expenses there cost and timing is well unexpectable.

LilacPixie

i do £50 a month for car fund and £50 a month for house emergencies.

determined_new_ms

Hi, until recently I'd be quite done in & worry about where the money was coming from, but my debt is almost clear now. As I've religously paid off my debts since Jan 1st, when I've had something unexpected I've put it on my caahsback cc which gives me up to 56 days to find the money, from selling things & cutting back on "pocket" money. Now I've only got a small amount on my loan (which the interest was fixed when I took it out) I am overpaying by double the repayment amount & building up a little surplus to cope with added expenses.

I intend to build up £500 for motor repairs & once I have that I'll put £50 pm into an emerency fund.

It aint easy when ur paying off debts, at least that was what I found as every penny was earmarked...

lililoo123

Have you ever thought about paying into a credit union? you can google to find out of any in your area. I belong to one in my local area, basically you save into it every month an amount of your choice and then can request a loan of upto 4 times the amount you have saved. I just pay into this monthly and try and forget about it. I see it that if ever i have a problem like needing boiler fixed or new fridge i can request a loan, it doesn't include going to a bank and the rates are reasonable and charges not high. When you pay back your loan payments a proportion of that amount is saved again if that makes sense. Best google for more explanation. Hope this helps.

mullymessiah

goingforward wrote: »

Well i ebay everything and anything that isnt used / been outgrown etc and that money stays in my paypal account. I rarely buy from ebay so any money i do make just stays in my paypal account until i need it. Then if i get a car expense for example i transfer that amount to my bank account. I dont transfer when i sell something as the money would just get wasted.

This month so far i've made nearly £300 by ebay old wii games, kids clothes and stuff we no longer needed.

Good idea, I may consider this one. Only drawback is the 2/3 days access to money..

mullymessiah

lililoo123 wrote: »

Have you ever thought about paying into a credit union? you can google to find out of any in your area. I belong to one in my local area, basically you save into it every month an amount of your choice and then can request a loan of upto 4 times the amount you have saved. I just pay into this monthly and try and forget about it. I see it that if ever i have a problem like needing boiler fixed or new fridge i can request a loan, it doesn't include going to a bank and the rates are reasonable and charges not high. When you pay back your loan payments a proportion of that amount is saved again if that makes sense. Best google for more explanation. Hope this helps.

I will google but do they credit check if loan needed?

Hannah_10

Same as you pretty much- Bank of Boyfriend or Bank of Sister if the need really can'twait even a few days (currently clear to boyfriend and repaying sister who is included on my DFW diary as a creditor). Sell something has also happened. Twice now I have had to part with my most loved possession in dire emergencies- which is heartbreaking, but when it's for your kids there isn't a choice. Cut back to beans on toast and don't use the car is sometimes enough if the emergency is fairly small. Or the one no-one wants to have to do- let a bill go unpaid.

Sadly there isn't a lot you can do, you can only plan for the forseeable, not everything is. Having an emergency fund is a good strategy but when you're paying your way out of debt too it can be hard to priorities the need, so I don't. Bank of Boyfriend has to act as the emergency fund instead.