How to prepare your pockets for unexpected bills

“Bankrate commissioned Princeton Survey Research Associates International to conduct its Money Pulse survey on budgeting and unexpected expenses. It interviewed 1,000 people December 17-20, 2015, with results having a sampling error of plus or minus 3.8 percentage points. “The survey shows that a very significant minority of American households apparently don’t have the resources to pay for an unexpected expense of around $1,000,” says Stephen Brobeck, executive director of the Consumer Federation of America….Nearly 4 in 10 respondents, 37%, say they would pay for an unexpected expense with savings, Bankrate’s survey found.” Bankrate.com

By having separate accounts when an emergency does pop up then you can take the money from your emergency fund, instead of having to swipe your credit card. The credit card that you’re already trying to pay off and now you have to swipe it again to pay for your car, or dentist, or whatever other emergencies that happen to pop up. Which will now push you further into debt?

 In order to avoid this whole situation, do yourself a favor if you haven’t already and be sure to sign up for a high interest online savings account and create a sub savings account for your emergencies.

Be sure to open an account that is free or has a low payment.  Also be sure to check if there are any fees associated with having the account. (Some accounts charge you if you don’t have a certain amount of money inside them) I have Capital One, but there are a ton of great online banks you can choose from.  Check out bankrate.com for a full list! At Cap One, I’m able to name each of my accounts that way I know exactly what I’m saving for.

You want to make sure that you are always putting money aside for a rainy day.

How much you should have in this account is different for everyone. Some experts recommend saving 3-6 months of your monthly bills into an emergency account. Others recommend saving 6 -12 months of your monthly bills. Whichever you think is best for you, do it! Just start saving. I’ve written about the top accounts you should have as an adult here. I know it still sucks when emergencies pop up and you have to pull money out of it, but on the bright side at least you have the money and don’t have to put it on your credit card or delay getting your teeth pulled and be in pain for months because you have to save up for the surgery.

Use your past experiences to help you plan for the future.

I know we can’t predict the future, and that sometimes life just happens however,  If you know that the year before you’ve spent a lot of money on your car, or at the dentist chances are you want to set aside some extra money into your budget for these expenses. That way when they pop up, you’re not unprepared and shocked. If you get a large bill upfront you may be able to set up a payment plan be sure to ask about payment options.   Need help tracking your money goals and credit card debt? I’ve created this FREE  money goals workbook for you, Get yours now! Source http://www.bankrate.com/finance/consumer-index/money-pulse-1215.aspx#ixzz47Efnd6AT   Sources]]>