A guide to saving for unexpected expenses

These strategies can help you stay the course when you have to dip into your emergency fund or money put aside for unexpected expenses or events.

We all have our monthly bills: rent, utilities, insurance, car payment or student loans. We all buy groceries and occasionally eat out. These are the normal expenses we have all come to expect, and we all plan our budgets around them.

However, we don’t always plan for the moments when the muffler falls off the car or an accident lands you in the emergency room. According to a survey, only 39 percent of people would be able to pay a $1,000 unexpected bill from their savings.

Whether you have a surprise expense you need to pay today or you’re just getting an emergency fund started, here are some ideas to consider when saving for unexpected expenses.

Work with credit card companies when an unexpected event occurs

Americans have an average credit card balance of $5,221, which can result in payments that take large chunks out of your paycheck. The burden of these payments can grow as interest builds, especially if you are behind for a month or two. 

There are options for working with your credit card lender to reduce your commitment, and many companies will be happy to discuss your options. You can ask them to erase past late fees, or even negotiate a reduced monthly payment that’s more aligned with your paycheck. Some of these options may affect your credit or credit lines, so be sure to research your options.

Sell your stuff to free up money for unexpected expenses

Gone are the days of yard sales for making a quick payday. These days, you can turn to ecommerce websites in order to sell your unneeded belongings. You can put last year’s wardrobe up for sale on auction sites, and make money selling your art on sites like Etsy and Ebay. You may even be able to sell some things via neighborhood-specific apps like Nextdoor.

Earn extra income to save for unexpected expenses

If you work a typical nine-to-five job, taking advantage of your free time at night and on the weekend can help build up additional savings to quickly pay off an unexpected expense. Consider traditional jobs — retail, customer service or the food industry — but also think about taking on smaller projects, such as participating in online marketing research or virtual paid focus groups.

Take on a short-term personal loan

Taking on a short-term personal loan from your bank can help ease the one-time cost of an unexpected expense. Consider small loans — $100 to $1,000 — that you will be able to pay back within a reasonable amount of time. These loans will allow you to spread the costs of an expense over a number of months, instead of forcing you to pay the amount upfront. Review the terms of any loan agreement carefully, especially the fees and interest rates you could be paying – some of which could be significant, depending on the lender.

Re-budget to live below your means

There are some expenses that you cannot avoid — housing, transportation and food — but you can consider cutting back on nonessential spending. The average American spends $2,913 on entertainment each year. While it is important to enjoy yourself every once in a while, cutting back on a few nights out or canceling one of your online video streaming services will show up in your bank account.

Ask for a paycheck advance to cover unexpected expenses

Depending on your employer, you may be able to get paid in advance for work you will be doing in the coming weeks. All companies are different, and you should talk with your boss, manager or a member of human resources about the specific company guidelines.

Make sure you’re prepared for next time by saving now

Whatever your unexpected expense, one or more of these strategies will at least help to get it paid off. Consider saving money for unexpected expenses in a high-yield savings or money market account going forward — having even a small amount saved in an emergency fund will help you when it comes to the burden of your next unexpected expense.

For more help, consider using a personal loan to cover unexpected expenses.