How I Handled $5,000 in Surprise Expenses

By Jacob Hartog
October 28, 2016

It all started with an unfortunate ride home from work on my motorcycle. The car in front of me slowed and pulled to the right toward a driveway entrance. I accelerated to pass on the left. Then, suddenly, instead of turning into the driveway, the driver flipped a U-turn. Boom! In a split second, I T-boned the car, leaving the front fender dented, my bike nearly totaled, and my leg in agony.

One ambulance ride later I had a $600 hospital bill in my hand. I tried to feel grateful. I was still in one piece, and thankfully I had no broken bones according to the x-ray. Then I thought about my bike. How could I afford to get it fixed? And how would I get to work so I could pay any of these bills?

Fortunately, I got a lucky break. My grandparents offered to lend me their car while my bike was in the shop. One problem solved, or so I thought. The next day after work, I walked back to my car in the company parking lot only to find it was gone! Towed! Apparently, my company had changed our allotted parking spaces and failed to notify me. My lucky break turned into an unlucky disaster.

And it got worse. After a $25 Uber ride to reclaim the car, the tow lot was closed, which they used as an excuse to charge me an extra $150 “after hours” charge on top of the $380 towing fee. As I debated what to do I got a text from my best friend. He texted to tell me he’s getting married. Wants me there next month, on the other side of the country. I forked out the $530 and texted him back as I walked to the car. “Congrats! You know I’ll be there.” Sigh.

In just a few days I had racked up over $5,000 in unexpected expenses. I had no idea what I was going to do about it. I needed to come up with a serious game plan.

We’ve all been there. Surprise expenses can come out of nowhere for anyone–your car breaks down, your computer gets stolen, or you end up in the hospital. When only 20 percent of us Millennials have a savings account, managing these out-of-nowhere expenses can put you in panic mode.

Luckily I did come up with a game plan. I got back on track, got back on my bike, and learned a few lessons along the way. Here are some tips that helped me deal with my surprise expenses that may work for you too the next time a bill hits you out of the blue.

Ask for a payment plan.

Many billers will let you pay off your expenses in installments. For example, if you’re sent to the emergency room and end up with a huge medical bill like me, call your insurance provider and ask them about payment options. When I called about my $600 bill not only did they agree to monthly payments, but it turned out there was a mistake on my bill. My actual out of pocket expense was reduced by $300! Imagine if I hadn’t called. No one is handed a flexible payment plan or billing corrections automatically, so ask. It definitely can’t hurt. 

Defer the expense if you can.

Even if you aren’t in a car crash, a surprise expense can cause your head to spin. Before you go digging into your life savings to replace or repair something you think you can’t live without, let the shock subside. When you’re in a more rational mindset, determine if it’s truly an emergency expense that you need to pay right away. You can also research alternatives that don’t cost as much money or find ways to fix the problem yourself. For example, If your dishwasher breaks down, consider washing dishes by hand until you have the means to get it fixed or replaced. 

Cut expenses and sell items you don’t need.

If you’re in a bind with no savings, look for ways to cut costs or consider selling items you can live without. Take a hard look at what you spend money on every month. Did I really need 100 channels of cable and a daily grande mocha? Cutting those saved me over $150 a month and I didn’t even miss them.  

Then take inventory of what you own and ask yourself if you really need it. These days there’s an app for selling just about anything second hand. Check out “re-commerce” apps like Grailed, Tradesy, Poshmark, and ThreadUp to sell gently worn clothing, and of course eBay for just about everything else. Being in a financial bind forced me to finally clean house, and I was able to earn some serious cash by selling off my old guitars and bicycle helmet.

Ask for a loan.

If you’ve exhausted ways to cut back, and the biller isn’t budging on payment options, consider looking into a personal loan. The benefit of a personal loan is that you can consolidate multiple bills into a single payment at a better interest rate than you can typically get with a credit card. Each payment helps pay down the principal, and it can reduce your credit card utilization so that your credit score isn’t negatively impacted. You might also consider borrowing money from a friend or family member, but be warned this can put stress on your friendship. If you’re going to ask someone you know for a personal loan, be proactive about putting a payback plan together and stick to it so you don’t end up in relationship debt.

Prepare for the future.

While you may not be able to predict the future in terms of car accidents, parking tickets or home repairs, you can budget for them. Likewise, no matter where you are in your career and earnings, most of us with full-time jobs are “at-will” employees. That means zero job security. Experts say you should have at least three to six months worth of expenses saved up in an emergency fund so that you’re not putting your entire lifestyle at risk in the event you lose your job.

Saving up three to six months worth of expenses may seem daunting, but you might be surprised how much you’re able to save when you make it a priority. If you’re lucky enough to be in a position with no unforeseen expenses today, consider what you might do to tighten your belt if you got hit with $5,000 in bills out of the blue like I did. Reevaluate your monthly expenses, find things you can do without and look for ways to earn a little extra cash.

If you don’t have time to think about savings and want it to happen automatically, enroll in an automated savings program like Chime’s Automatic Savings. It’s a great way to start building your emergency fund without even thinking about it.


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