Life can sometimes feel like a financial revolving door: Paychecks come in and bills go out. We work so that we can pay for the essentials — and hopefully some extras — in our lives. If you’re lucky, it doesn’t get more complicated than that. But a sudden or unexpected expense might lead you to need a helping hand to stay afloat.
According to a recent survey, if suddenly faced with a $1,000 bill for an unexpected expense, only 39% of adults would be able to pay for it out of their savings. The Federal Reserve’s yearly study on the economic wellbeing of Americans suggests that the situation is even more dire: four-in-ten Americans wouldn’t be able to cover a $400 unexpected cost.
The good news is it’s possible to plan ahead for the unexpected. By knowing the most common surprise expenses, and roughly how much they cost, you can start to prepare in case you encounter one.
Unexpected expenses can throw a wrench in your monthly budget. One study found that more than one-in-five adults struggle to pay their bills in full each month,  and an unexpected cost could lead to ongoing bill disruption. Having backlogged or unpaid bills can lead to other financial issues, like growing debt or credit score issues. Here are three ways to manage your bill payments and be ready for the unexpected:
1. Start saving now. Being prepared ahead of time may be the best defense against unexpected costs. Though saving can be difficult, building up an emergency fund can help you pay a one-time cost on top of your ongoing bills. Consider putting money aside on a regular basis into a savings account to help you prepare for the unexpected.
2. Take out a short-term money loan. Borrowing money — even $100 to $1,000 — from a financial institution you trust can help create a bridge over your unexpected expense. Institutions may be able to arrange these loans quickly, and, depending on the terms, may allow you to set up monthly payments so you’re on a plan to pay them back. Certain loans may come with high interest rates so be sure to ask your lender before committing to a loan.
3. Cut your expenses as much as possible. Even if you had savings to pay for a sudden expense, you may want to slash your daily expenses to help you rebuild them going forward. Making your own food, for example, may not seem like a lot, but the average household spends $3,008 per year eating out.
Paying for unexpected expenses is a part of all of our lives, but making sure you’re ready — whether it’s by saving money ahead of time or knowing where you’ll turn if you need extra funds — can make all the difference.
Dealing with an unanticipated expense? Consider a small personal loan to help cover it. Learn more here.