Be prepared for unexpected expenses
We simply cannot predict what life will throw at us. But we have options when unexpected costs arise. Listener Rob is a young homeowner who needs to repair his retaining wall but does not have access to a home equity line of credit. So what should he do?
Learn how to pay for your unexpected expenses
What to do if you have unexpected expenses?
In this episode of Queer Money, we discuss what to do if you’re faced with an unexpected expense. We’ll explain the difference between an unexpected expense and an emergency expense in terms of time sensitivity and payment options, and recommend you set up a special savings account for unexpected expenses – especially if you’re a homeowner.
We’ll also explain options for covering unexpected expenses (if you don’t have a dedicated savings account) and weigh the pros and cons of dipping into your emergency savings, relying on financing, or borrowing from family and friends. Listen to our advice to Rob and find out what you can do to cover the unexpected expenses many of us are currently facing.
As many are now realizing, unexpected and emergency expenses arise all the time. -DavidClick to tweet
Topics covered about unexpected expenses
How we define an unexpected expense
- Doesn’t need to be covered immediately
- Time to look around and weigh options
How we define an emergency expense
- Must pay NOW to avoid consequences
- Need instant access to funds
Your options for covering an unexpected expense
- Open a special savings account (especially for homeowners)
- Take advantage of emergency savings options
- Rely on financing
- Borrow from family
- Use peer-to-peer lending
The three best options for financing an unexpected expense
- Home equity line of credit
- Personal loan
- Credit card with No interest on new purchases
Our advice for Rob to pay for his retaining wall
Open a savings account for home maintenance
Take advantage of emergency savings options
Use a credit card with no interest for new purchases
Take out a personal loan
Find the best savings rates using the table below
Money Saving Resources