While creating a budget is a sensible financial decision, it may not be enough to cope with unpredictable expenses.
Life’s not always that easy, and sometimes the unexpected puts a spanner in the works.
Having a contingency fund in your budget is extremely important, and you should put it aside for unexpected emergencies. That’s where a personal loan can help.
Let’s look at five unforeseen costs you might face if an emergency arises.
Property damage
Besides malicious property damage, including graffiti, Australia is undergoing marked climate changes due to global warming.This is causing a lot of flood damage in certain areas.In February last year, Brisbane had over 70% of its average annual rainfall in only three days.
Houses are generally not insured against “acts of God”, which leaves the owner with unexpected, and sometimes very costly repair expenses.
There are also many smaller and relatively common things that can go wrong, like roof leaks, burst pipes, blocked toilets and drains, and electrical problems.
Most of these entail calling for professional help, and often, the funds are unavailable. A budget only allows for so much.
Unemployment
Many people were made redundant when Covid-19 hit us, and with the global economy at an all-time low, more and more businesses are downsizing.
This could mean you have lost or are in danger of losing your job. Despite the Job Seekers’ Allowance, the average monthly salary in Australia for 2022 was approximately $7,750, while the maximum fortnightly payment for job seeker is $850,20 making a monthly amount of A$1,700.40. This is a huge difference of $6,049.60.
This could really strain your budget. A personal loan with affordable repayments could save the day if you find yourself unexpectedly unemployed.
Vehicle damage
According to the Car Accidents Survey and Statistics 2021, 64% of driver’s licence holders over 18 have been involved in at least one car accident.
Even if your car is insured, there’s the excess payment.Other damage can include engine trouble, brake issues, electrical or transmission problems and shock absorbers. There’s also exterior damage to think of, like paint scratches, tires and wheels and mirrors.
Perhaps you need to register or licence your vehicle and haven’t planned for it. Or maybe you’ve incurred traffic fines that you’re unable to pay.
Whatever the reason, any of these things could upset your carefully planned budget.
Medical treatment
Emergency medical treatment is something that can’t be put off or postponed. Most budgets don’t allow for large medical expenses.
This can pose a real problem and throw the budget out of the door. Anything can happen, and while Medicare and the public hospital system offer free or low-cost treatment, they don’t cover things like adult dental services.
There’s not much worse than a terrible toothache, and that’s also not something one can ignore or postpone treating. Dentists can be quite costly, and with the financial pinch most of us feel these days, your budget might not allow for a dental visit.
Family emergencies
Last but not least, there are things like family emergencies. Perhaps a loved one has passed away, and you and your family need to attend the funeral. Travel can be expensive, and often there is accommodation to think of as well.
With bushfire threats, a family member could lose their home and possessions. This could mean that they have to come and live with you temporarily, or you could feel like you have to help out with money.
In an emergency that your budget doesn’t cover, don’t despair. You can reach out to Credit24 to learn more about affordable personal loans.
IPF Digital Australia Pty Ltd, trading as Credit24, ABN 59 130 894 405. Australian Credit Licence 422839. The information in this article is of a general nature and does not take into consideration your objectives, financial situation or needs. Lending criteria, fees and charges apply. For more information about our products, eligibility criteria and terms and conditions, please visit www.credit24.com.au.
Sources:
- https://enhancentertainment.com.au/blog/7-worst-event-budget-blunders-how-to-avoid/
- https://www.timedoctor.com/blog/average-salary-in-australia/
- https://www.bbc.com/news/world-australia-61432462
- https://www.servicesaustralia.gov.au/getting-payment-when-youre-recently-unemployed?context=60064
- https://www.budgetdirect.com.au/car-insurance/research/car-accident-statistics.html
- https://www.mynrma.com.au/insurance/resources/how-your-excess-affects-the-cost-of-your-car-insurance
- https://www.credit24.com.au/loans/car-loans/
- https://www.health.gov.au/about-us/the-australian-health-system#:~:text=Medicare%20and%20the%20public%20hospital,cost%20of%20your%20health%20care.
