Car repairs, medical bills, and other emergencies can strike at any time. These unexpected expenses can create a significant financial strain on those who are unprepared for them. Finding ways to manage these unexpected expenses could prevent you from falling into financial problems. However, if you find yourself falling into bankruptcy, then consider asking a Kingsport bankruptcy lawyer for help.
THE FRUSTRATION OF UNEXPECTED EXPENSES
One month your finances are going well and then an unexpected emergency arises and you see your finances draining. All it takes is one incident to rapidly deplete a person’s savings. There are many frustrating results of unexpected expenses including:
- Running out of money
- Having little to no savings left
- Moving farther away from financial goals
- Falling into debt
- Coming close to bankruptcy
Sometimes all it takes is an expensive car repair or appliance replacement to offset financial plans and monthly expenses. Those who are living paycheck to paycheck often suffer a variety of financial consequences as a result. Some people may have to delay or miss paying a monthly bill to cover the unexpected expense.
When an unexpected expense is not manageable, many people will use a credit card, borrow money from loved ones, sell something, or use a personal loan. Most of these options have the potential to put someone further into debt. However, sometimes these options are unavoidable.
Medical bills in particular can be some of the most expensive financial setbacks. Certain injuries and medical conditions cannot be ignored, or else the person’s life could be at risk.
HOW TO MANAGE UNEXPECTED EXPENSES
There are two main ways you can manage unexpected expenses that include an emergency fund and living below your means. An emergency fund functions as a financial cushion for emergencies in life like car accidents, injuries, home damage, and car repairs.
Many people recommend building an emergency fund of at least six months’ worth of income. However, the safest method would be to save at least a year’s worth of income. This sounds daunting at first but is not as intimidating if you break down the end goal into smaller steps. Reward yourself after each mini-goal you set. For example, you could reward yourself after you reach the halfway point.
When it comes to living below your means, this means not spending more money a month than you make in a month. Spending more money on wants than needs is what often leads people to struggle with this. Making a monthly budget and cutting unnecessary expenses can help you build an emergency fund faster and be prepared for financial emergencies.
This does not mean you can never buy what you want. What this means is having financial security built up until you can buy the things you want the most.
BANKRUPTCY LAWYER IN KINGSPORT, TN
Bankruptcy can be a terrifying experience to go through. Reach out and contact us today at Tom Bible Law by dialing (423) 690-7712 for a consultation with one of our lawyers. Our legal team of Tennessee bankruptcy attorneys can help you explore all your bankruptcy options. We can be found throughout the Tennessee cities of Chattanooga, Kingsport, and Tullahoma.