None of us can anticipate all of our expenses, so how can you budget for the costly unknown?
You can start this series here with “How to Budget for Emergencies (The Series).”
Although this is the least common financial shock studied, it is one of the most difficult because at its core it is a problem money cannot solve.
Financial shocks can come in all shapes and sizes. This strategy of budgeting should increase your chance for success over the long haul.
Whatever technique you use to smooth your income, providing for the possibility of having a sudden reduction in income can help your family self-ensure against this potential financial shock.
This is the financial shock of a trip to hospital. It is upsetting, expensive, and unexpected.
This is the financial shock of a major home repair. It is expensive and surprising.
This is the financial shock of a major car repair. It is the most common financial shock with 30% of households reporting such an event within the last 12 months.