How to Stay Financially Stable Despite Unexpected Bills
Saturday, December 15, 2018, 6:00 AM | Leave Comment
Life is full of unexpected twists and turns. Part of the challenge of living is learning how to adapt to changes and grow from failures and mistakes. Of course, not all of the unexpected changes in life are going to be something you can tackle, and many of them may create additional challenges.
Anything from unexpected medical bills, to a car crash, to a tax bill when you were hoping for a tax refund — all these things can throw a wrench in your plans and set you back hundreds and thousands of dollars. So how can you stay financially stable despite these unexpected bills — especially if you haven’t set up a safety net just yet?
Having an emergency fund can be a godsend, but not everyone has had the ability to set up a large enough cash cushion before an emergency or accident happens. Here’s some advice to help you through difficult times so you can stay financially stable despite life’s curveballs.
How Can You Prepare for the Worst?
If you’re lucky enough to not be struggling with an unexpected expense right now, then you may be able to set up a plan for your future that can help you get through those difficult times. There’s no way to predict the future, which is why budgeting for the unexpected is such an important thing to consider when you plan out your personal budget.
As a first step, you should consider how much money you can set aside for each paycheck that can be saved in a dedicated “emergency fund.” You should ensure you’re not taking enough out that it would make your overall expenses tight, but it should be enough to help build up a safety net within a few months’ time. Even something as small as $10 or $20 can add up fairly quickly.
Additionally, it’s best to keep that money in an accessible account. Putting your savings into investing is unwise as you won’t be able to easily withdraw money when an accident happens. Instead, opt for a savings account that possibly has the added benefit of accruing compounding interest on a monthly basis. That way what you do put into the account has the potential to grow slightly but can easily be withdrawn when crisis strikes.
Finally, this savings account should be completely off limits until you absolutely need the money. It can be very tempting to occasionally dip into this account and take out a few dollars at a time, but the more you do that, the faster this savings account will deplete. Instead, do your best to stay disciplined, and remind yourself that you’ll need this money someday in the future. The more you can save up, the easier it will be financially when you’re faced with an unexpected expense.
Researching All Your Options
When accidents and crises happen, it can be difficult to think properly. The stress and shock you’re feeling in the moment can be overwhelming. However, no matter what your situation, chances are there are some options available to you that may help you get out of significant bills.
Here are a few examples:
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Medical Expenses
An unexpected medical diagnosis can be an especially difficult hurdle to face. On top of the potential emotional toil you’ll feel at learning of your diagnosis, you’ll also be faced with mounting medical bills and having to deal with insurance.
Even very common conditions can be their own hurdle. Every year, nearly 20 million Americans are diagnosed with a new STD — anything from the most common (herpes), to the most deadly (HIV and HPV). Simple tests to diagnose these conditions can cost hundreds of dollars if those being tested are without insurance, and can still cost quite a bit with insurance. And for the most serious of cases, such as HIV or HPV (which can cause cervical cancer), patients must go through additional extensive treatment, medications, and doctor’s visits.
Healthcare is expensive, but it’s also essential, which is why unexpected medical bills can be so difficult to face. So what options do you have?
Many people may be unfamiliar with how the medical industry works; some may argue that confusion is part of its overall design.
Regardless, there are some ways to negotiate medical bills that people often aren’t aware is even an option:
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Look for sliding-scale clinics in your area that will charge you based on your income. Some of these clinics may even give you free medical care if you’re on an extremely limited income.
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If you’ve had an ER visit or hospital stay, speak with the hospital’s billing department to discuss repayment plans. Some hospitals may be able to reduce your bills or may allow you to pay them in small increments over a few months/years.
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In addition if you request an itemized bill, and you ask them to clarify any medical code, this may help you notice inconsistencies (like if they charged you for a medication you never received), which can also help lower your bill.
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You may even be able to negotiate medical coverage with your insurance provider by giving them a call and discussing your policy. If you don’t have insurance, you can always sign up for Medicaid or Medicare, which most clinics should be able to help you with when it comes to filling out the paperwork.
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Housing and Car Expenses
Although cars aren’t an essential item you need to survive, they are extremely important to helping you get to and from work, the grocery store, and school. Your house, on the other hand, is both vital to your personal well-being and your financial state. Unfortunately, both homes and cars are prone to being damaged in some way: whether it’s an unexpected car accident or a natural disaster like flooding.
No matter what the issue may be, it’s important to report the incident as soon as possible to your insurance provider. Taking photos, logging information (or exchanging information with the other party in the case of a car accident), moving important items and people to safety, and seeking medical attention when you need it are all essential first steps to dealing with these crises. The financial worries can come later.
After your immediate concerns have been met, you can then start planning for the financial issues. Some insurance providers may not cover everything, or if you don’t have insurance, the burden of paying for everything will be on your shoulders. Your best option is to do some shopping around and see if anyone offers discounted services, free quotes so you can compare prices, or repayments plans so you can pay them back over time. Of course, there are also ways to find extra money, even when your budget is already tight.
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Finding Stability When Budgets Are Tight
If you need money immediately for an emergency, you can consider other options to help you through your situation such as:
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Debt consolidation allows you to take existing debts and reduce them down to one account with better interest rates and sometimes smaller monthly payments. If you already have a lot of existing debt, this option can make it easier to track your savings and plan your budget, and may also take away from some of your monthly expenses.
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You can also start selling some belongings to raise money. Hold a yard sale or find miscellaneous stuff around the house that you can sell online. Any little bit can help.
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Another option is to taking out emergency loans, but be sure to pay attention to the fine print and avoid high interest rates or large fees. Be mindful that payday loans and other predatory services exist to prey on you in your moment of need, so it’s best to avoid those programs if you can.
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Life is full of curveballs, and financial curveballs especially can be scary to face. But if you plan properly, research your options, and look for alternate ways to pay for your emergency, you may be able to stay financially stable through it all.
Throw us a like at Facebook.com/doable.financeThis article is written by Avery T Phillips.
