Paying for any expense is never a fun time. But unexpected expenses are especially the worst. They often destroy the most potent of financial plans and leave absolute destruction in their wake.

Sometimes it’s a medical emergency that is worth six months of your salary. Another time, you have to attend a wedding —somewhere in Europe.

According to Bankrate’s Financial Security Index, three in ten Americans have no emergency savings at all. So what should they do if faced with expenses they’re not expecting?

There are several ways to tread waters in such a scenario. But before going into them, let’s take a look at some of the most common ways unexpected expenses emerge.

Common Types of Unexpected Expenses

Even if you map out a perfect budget that covers everything from rent to grocery, your financial stability is vulnerable to some of these unpredictable expenses.

1. Medical Expenses

Anyone not covered under a good insurance plan can be devastated by medical expenses. According to the New York Times, the majority of American families are a single medical emergency away from complete financial ruin.

Unfortunately, a $1000 medical bill is enough to put most households under. And let’s not ignore the mental toll health-related matters takes on an individual. Money should be the last thing on a person’s mind while they’re dealing with health issues.

Ideally, it should never come down to health against money but unexpected medical conditions often create this bleak situation for people who don’t have any savings set aside or are uninsured.

2. Home Maintenance

You never know when something will go wrong in the house. Be it termites, plumbing issues or the refrigerator breaking down — house expenses come out of the blue.

It’s hard to plan for them but one can minimize the risk to an extent. While you can not predict a colony of insects finding refuge in your attic, you can get someone to look at the wiring and plumbing system to see if any issues can occur in the immediate future.

Even then, these types of expenses are inevitable. And without any savings in the bank, they can be especially worrisome.

3. Buying Gifts or Taking a Trip

You would be surprised to know just how many people go into debt in the holiday season. People who haven’t saved throughout the year often seek out loans for buying Christmas gifts.

But this can be avoided with an appropriate saving plan. Meanwhile, there is no way to plan for your friend announcing her pregnancy and buying something cheap for her baby shower is not an option either.

Similarly, unplanned trips can throw one’s financial plans out the window. Whether you’re flying out to attend a friend’s wedding or to see an uncle who’s going into surgery —these trips can often be quite costly.

4. Car Issues

Having your own set of wheels is always a good thing. However, with your car comes expenses like property tax, inspections and maintenance.

Sometimes a ride can give you other troubles as well, which is why anyone that owns a vehicle should have a car savings account. You never know when the engine will break down or any other repair will be needed.

When that happens, you need to have a plan or you’d be left with a broken down car and a massive bill from the mechanic.

5. Stolen Items and Mugging

No one wants to be at the receiving end of theft or mugging. However, life is unpredictable. Losing something valuable can be both personally and financially damaging.

Replacing items is a tedious process especially when you’ve been a victim to a crime. Insurance and savings can come to your rescue in such situations.

Still, it’s better to stay safe, take inventory of expensive items, save their pictures in a secured location and write down their values. In case they are ever stolen, you should take all the necessary preparations.

How to Pay for Unplanned Expenses

Life is uncertain and things often don’t go as planned. Paying off unforeseen expenses might seem like a mountain to climb. Fortunately, a few tricks can make this summit a whole lot easier.

1. Reduce Your Variable Expenses

It’s hard to completely overhaul your expenses on short notice. Although the process can be overwhelming, you would need to go through your statements, utility, credit card, receipts, loan payments and other spendings.

Knowing where the money is going will put things into perspective. It will also help you reduce variable expenses such as electricity bill, car maintenance and grocery among others.

Reducing these expenses will not be easy. It will require lifestyle adjustments such as avoiding transportation costs by carpooling, cooking at home instead of eating out and skipping the manicures for a while.

When it comes to shopping for groceries, there’s always the option of seeking discounts. This will be easier online than in brick-and-mortar stores. Digital coupons can help you save on regular household expenses and bring down your variable expenses considerably.

2. Seek a Personal Loan From a Credit Union

Credit unions are often the better alternative to commercial banks as the latter tend to have higher interest rates. The only catch is that membership is required in credit unions before one can apply for a loan.

This requirement can be fulfilled by opening a savings or checking account with the credit union. What you have to examine is whether savings in interest is greater than added requirements.

For anyone that’s already a member of a credit union, securing a personal loan with relatively lower interest rate shouldn’t be that much difficult.

3. Reach Out to Family

Borrowing from family might be one of your better options. It’s extremely rare for a relative to charge interest on a loan. Also, it’s less likely for this loan to have a predetermined repayment model where you’d be repaying a fixed amount each month.

But there is a downside to such a loan. Involving money in relationships can end up having some negative consequences. Research suggests that almost 45% of such transactions end up badly.

One way to avoid such an ordeal is by making the loan somewhat official. Putting the loan in writing and setting some loose terms might eliminate the possibility that you will take things lightly. After all, whether you borrow from a cousin or a bank, a loan is meant to be repaid.

4. Utilize Your Savings

While borrowing money to pay for an unexpected expense might buy you some time —dipping into your savings is a much more permanent solution. But for this, you need a cash savings account that can be accessed without any penalties.

Beyond this, you need to ensure the money is not earmarked for some other purpose and whether or not you would be penalised for withdrawing it. An early withdrawal penalty is the last thing you need on top of a surprise expense.

Keep in mind that withdrawing cash savings is preferable to investments. Generally, the investments are meant for savings that have medium-to-long term.

5. Sell Personal Items

Quickest way to make some easy cash is by going through your personal belongings and selling items that are no longer needed.

Look for clothes that no longer fit and sell them to local consignment shops. Organize a garage sale. Find collectibles like records, DVDs and action figures and put them up on websites like eBay. You can even advertise these on relevant Facebook groups to get better prices.

Not only would you make some easy bucks doing this but also free your home from unnecessary clutter.

Conclusion

Among the things that are certain in life, unplanned expenses are right up there with death and taxes. There are infinite ways in which you can be faced with a money situation you were least expecting.

A car accident can have you not only paying for fixing the vehicle but also treating any injuries you might’ve sustained. Similarly, a death in the family incurs ridiculously expensive funeral costs.

Thankfully, these risks can be somewhat mitigated through a good insurance plan and by setting aside some savings. There are other ways to go about this as well. One can reduce their expenses, seek out loans and sell some unnecessary items to ease some of the burdens.

The only option that’s not on the table is giving up and letting these expenses overwhelm you.