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No matter how carefully you plan your budget, handling those unexpected expenses like damage to your home or an accident of some sort can be incredibly overwhelming. No amount of budgeting will really prepare you for some of these things, leading to stress for you as you figure out where to turn and what to do. 

 

Take a look at these 5 tips for managing unexpected household expenses. 

1. Build Up an Emergency Fund

One of the best things you can do is to build an emergency fund. In fact, this is one of the first things most people are taught in budgeting. Having a reserve emergency fund that is there when those unexpected expenses come up will make them easier to deal with. 

 

Budgeting can certainly be difficult. Start putting away just a little bit from every paycheck. If you can save 10% of your paycheck, then it will add up quickly. If you don’t feel like you can do 10%, start with 3% or 5% and then try to adjust it as you are able. 

 

A good rule of thumb for an emergency fund is to establish approximately 3-6 months of your typical income. This way if something comes up, you have funds to fall back on. If you have to use the fund, then work to build it back up when you can. This is so much better than high interest loans or credit cards. 

2. Where are Your Financial Risks? 

There are certain risks that you may need to be more mindful of or aware of than others. For example, maybe you have a brand new driver. Or perhaps your spouse is in a work field that is highly volatile. Assessing the risks that could affect your finances in a negative way can help you be more prepared. 

 

When you know the potential risks, you can create backup plans and start determining what you would do if something bad happened from these scenarios. Do what you can to prevent negative things from occurring, but be prepared if and when they do. 

3. Learn to Prioritize 

There will be times you can do things on your own and times where you need to hire a professional. DIY is great and it will save you some money from time to time. However, it’s not the end all solution to everything. Consider your needs and know when you should DIY it and when you should hire for it. 

 

For example, if someone in your household faces a personal injury, they could have long-term effects from it. Using a professional like Vaughan & Vaughan is a great priority to ensure that you get the best possible outcome. The Vaughan family law firm has expertise in this area. 

 

But if you’re trying to decide whether or not to hire lawn care services or mow on your own, then this is something you can choose DIY for. There’s a major difference here! 

4. Find Ways to Cut Costs

You can sometimes cut costs in unexpected places. We all need groceries, toilet paper, running water, and electricity. But what are some things you can do to help reduce expenses in these areas? 

 

Maybe you buy a lot of expensive groceries. Perhaps you can meal plan better and start purchasing some generic items rather than the more expensive name brands. This is a great place to start. Maybe you use a lot of electricity because lights and devices are always on. Start being proactive about turning things off when they are not in use. These little things can add up to a big difference. 

5. Be Willing to Learn and Improve

Finally, be willing to learn and make adjustments that will improve your situation. Evaluate your expenses, acknowledge when you make a bad decision, and just keep moving forward. Budgeting has plenty of learning opportunities and holding yourself accountable is hard. Instead of getting down, learn from your mistakes and move forwards to a brighter financial future.