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How to Cover Unexpected Expenses

  April 7, 2020  |    #Tools

Be prepared for unexpected expenses

We simply can’t predict what life will throw at us. But we do have options when unexpected expenses arise. Listener Rob is a young homeowner who needs to repair his retaining wall but doesn’t have access to a home equity line of credit. So, what should he do?

Hear how to pay your unexpected expenses 

What to do when faced with unexpected expenses

On this episode of Queer Money, we’re discussing what to do if you’re faced with an unexpected expense. We explain the difference between an unexpected expense and an emergency expense in terms of time sensitivity and payment options, encouraging you to start a dedicated savings account for unexpected expenses—especially if you’re a homeowner.

We also walk you through your options for covering an unexpected expense (if you don’t have a dedicated savings account), weighing the pros and cons of tapping into your emergency savings, relying on financing, or borrowing from family and friends. Listen in for our advice to Rob and learn what you can do to pay for the unexpected expenses many of us are faced with right now.

As many are realizing right now, unexpected and emergency expenses arise all the time. - DavidClick To Tweet

Topics covered on unexpected expenses

How we define an unexpected expense

  • Doesn’t have to be covered immediately
  • Time to shop around, weigh options

How we define an emergency expense

  • Must pay for NOW to avoid repercussions
  • Need immediate access to funds

Your options for covering an unexpected expense

  1. Start dedicated savings account (especially homeowners)
  2. Tap into emergency savings
  3. Rely on financing
  4. Borrow from family
  5. Use peer-to-peer lending

The top three options for financing an unexpected expense

  1. Home equity line of credit
  2. Personal loan
  3. Credit card with zero interest on new purchases

Our advice for Rob to pay for his retaining wall

  1. Start a home maintenance savings account
  2. Tap into emergency savings
  3. Use zero interest on new purchases credit card
  4. Take out a personal loan

Find the best savings rates by using the table below

Resources for saving money

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