Common Expenses That Millennials Are Not Financially Prepared For

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Personal finance is one of the most challenging and rewarding skills to master. With enough knowledge and practice, life can be made simple, and a significant weight will be lifted off of your shoulders. Millennials, in particular, are notorious for making it work no matter what the situation may be, but what happens when life throws you a curveball?

What Are Some Unexpected Expenses?

Unexpected expenses are costs that you cannot predict, such as natural disasters and home repairs. It is something that we see happen to other people, but we do not expect it to happen to us.

Bills that you know that a set due date and cost are not considered unexpected because you know what is coming ahead of time. People are more prepared to cover those costs because they are easier to add to a regular household budget.

What makes unexpected expenses so difficult to manage; not only is it impossible to add to a budget, we do not know how much it will cost us. How do you prepare for the unknown? Most people elect to save a certain percentage of their paycheck and put that money into their savings account so that the money is there when you need it.

Retirement

While it is a predictable expense, it is one of the most commonly postponed savings. As a young adult that is getting your life in order and possibly dealing with student loans, you have enough on your plate already. No one is thinking about what is going to happen when they get old, until they get old, of course.

While the majority feel financially unprepared to save for retirement, there are easily accessible options available. If your place of employment does not include a 401k, contact a financial advisor to talk about your options, and avoid relying on social security.

Car Accidents

Life prepares us to become independent; get a car, think about how much you will spend on gas, car repairs, get car insurance, etc. No one talks about the costs that come with getting into a car accident, depending on the severity of it. Regardless of who is at fault, the cost is more than monetary.

Approximately 1/3 of all highway crashes are rear-end accidents, some leaving a tiny dent, others result in your vehicle being towed away. Even as a careful driver, you cannot control the temperament of weather or other drivers. What else is there to do?

First and foremost, keep your car’s maintenance schedule to prevent any needed repairs from turning into larger problems. Aside from being well insured, you should avoid routes with high rates of accidents, and not drink and drive, because this will increase your chance of getting in an accident.

Medical Emergencies

Without insurance, a visit to the emergency room can range from $150 to $3,000 – not including any additional testing and services. A common train of thought is “I have health insurance, so that should not be a problem.” Is there a limit on how many days you can miss work before you are no longer compensated? There are other factors to consider.

Whether if it is a one-time medical emergency or a major illness that requires months of treatment, we do have some control over our health. It is possible to stop ourselves from getting sick. Do your part to stay healthy by listening to your body and taking preventative measures to catch anything early on.

Pet Emergencies

Of course, this only applies to those who have fur babies. If you have pets and never had to rush them to the vet, consider yourself fortunate. Pet accidents are one of the most stressful times of a pet owner’s life, and when it happens, we want to save them no matter the cost.

Depending on the emergencies, the vet bill can range up to the thousands. How can you protect accident-prone pets? You can take preventative measures to make your home and outdoors pet-proof. One example of this is keeping a trash can covered, so your pet doesn’t eat anything it’s not supposed to.

Bottom Line

These are not the only unexpected expenses you may face. Other factors to consider are the death of a loved one, unexpected traveling plans, etc. Aside from being insured where it is applicable, there is one thing everyone can do: start an emergency fund.

While it seems improbable that you can prepare for something that you cannot predict, saving up for an emergency fund is the best safety net anyone can have. Having money to fall back on is the only way to cover your expenses in the unforeseen future.

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