The Unexpected Costs of Living

Life is full of mysterious setbacks and hiccups. Especially when it comes to finances, nothing is for certain and nothing should be taken for granted. A healthy financial plan should take unexpected costs into consideration, because so many times in life we find ourselves paying money for things we didn’t expect. These are called contingencies and a fraction of your Visa debit card balance should be set aside to pay for them. The following is a short list of unexpected but common occurences that you could find yourself subsidizing and what to do should they happen:

Car accident. One of the great risk/reward, promise/peril dichotomies of modern living is driving an automobile. Its usefulness to business, commerce, and personal convenience is widely established, yet within a period of just a few seconds, you can find yourself in the hole for thousands of dollars because of a single errant turn of the steering wheel. Car accidents are one of the leading causes of death and also one of the leading costs of insurance. If you get into a car accident, immediately contact your car insurance company. If you can afford it, increase your deductibles in order to reduce your premium. Also, drop unnecessary coverage features.

Personal injury. A broken leg, deep cut, or surgery can cost you thousands of dollars in medical bills. Ideally, you’ll have health care insurance to balance out these costs. If not, you could find yourself in debt for years, possibly decades. Even with health care, the deductibles for some plans are up to $500 or more and that’s not counting the added costs of physical therapy, additional surgeries, and the time you may need to take off from work in order to recuperate. Our bodies are fragile and a major injury could happen any day. You don’t need to be paranoid, just financially prepared. It may be worth hiring a personl injury attorney. Often times you can be awarded significant amounts of medical subsidies from the courts. At the very least, contact your health care insurer and find out what procedures will and won’t be covered.

The vagaries of Wall Street. For anyone who invested significant amounts of money in stocks in the past decade, the fluctuations of the market are no surprise. Many people lost thousands of dollars, even their entire retirement plans when the economy crashed. Hopefully, this served as a lesson learned in the fragility of man-made systems. But for people who are persistent and keep investing in risky stocks, it’s good to be sure you’re not using money you can’t afford to lose. Investing in the stock market is no get-rich-quick scheme. Be patient and smart and look for promising penny stocks and stocks that pay healthy dividends.

We all know the normal costs of living. What can pass under the radar are the unexpected costs of living—freak accidents, injuries, market crashes and other anomalies that while unusual are somehow par for the course. Be smart and set aside a fund to help pay for these costs so they don’t liquidate your bank account.