Unexpected life expenses will still occur occasionally, but many people aren’t prepared to deal with them. According to a survey by the Federal Reserve Board, 12% of Americans can’t pay for a $400 emergency expense, and another 37% would pay for it through loans or selling assets. Fortunately, you can avoid being in such a situation by planning for various expenses ahead of time, thus allowing you to weather their costs when they occur. Below are some of the top life expenses to plan for in advance and the benefits you reap by having such contingencies in place.
1. Health Care
According to International Citizens Insurance, typical health care costs in the U.S. include urgent care ($80 to $500+), ER visits ($150 to $20,000), ambulance fees ($400 to $1,200+), and hospitalization ($5,000). The costs can even add up more when you factor in long-term health care or the cost of chronic disease treatments. As such, health care is one of the top life expenses to plan for in advance if you want to avoid financial troubles.
One of the top ways you can plan for health care expenses ahead of time is by purchasing a health insurance plan. For example, according to Forbes, the average monthly cost of Affordable Care Act health plans is between $928 and $1,336. In a medical emergency, these plans can help you save thousands of dollars in health care, thus preventing your life from going into a tailspin.
You should also include other expenses besides general illness and diseases when planning for health care costs. For example, you may require mental health care from time to time due to difficult circumstances you’re facing. Or you might need physical therapy to restore your mobility following an injury. Therefore, before choosing a health insurance plan, you must ensure it caters to all these expenses.
When planning for healthcare expenses, you should know that your insurance policy may not cover some costs. For example, most health insurance providers won’t cover expenses like fertility treatments, cosmetic surgeries, travel vaccines, private nursing care, and weight loss treatments. Therefore, you must also plan for these expenses, for example, by setting up a health savings account or investing in an employer-funded flexible spending account.
2. Dental Care
Dental care is another one of the top life expenses to plan for ahead of time, as dental treatment costs can quickly get out of control. According to Dentalplans.com, a typical dental checkup can cost between $150 and $250, while procedures like teeth cleaning and whitening cost between $400 and $900. Unfortunately, you can expect to spend even more when you include more complex procedures like dental crowns, veneers, implants, or treatments like extraction and gum disease treatment.
Fortunately, you can plan for dental care costs ahead of time by investing in dental insurance plans. And the good news is that you can find several dental insurance policies, from government-funded to privately funded plans. These dental plans will cover most dental care costs when visiting your general dentist, thus ensuring your teeth stay healthy while protecting you from financial risk.
Unfortunately, dental insurance may not cover all dental services. According to the Dental Health Society, dental procedures like implants are considered cosmetic and not usually covered by most dental insurance providers. Therefore, you need to develop more ways to pay for unexpected dental expenses not covered by your insurance.
Fortunately, you can find other ways to pay for your additional dental expenses. For example, several dental practices offer in-office dental plans, where you can pay a small monthly or annual payment in exchange for free or discounted dental services. Another excellent idea is to invest in a health savings account, which you can use to pay for any out-of-pocket expenses not covered by your insurance or in-office dental plan.
3. Your Car
Owning a car can offer several benefits, from increased convenience to more independence, flexibility, and freedom. However, car ownership is accompanied by several costs, which can sometimes pop up at the most inopportune time. Therefore, if you’re looking for more life expenses to plan for ahead of time, consider your car.
Insurance is one of the top ways to plan ahead of time when it comes to car expenses. Good auto insurance can help to cover unexpected costs like car damages and medical costs due to an accident, theft, and vandalism. You can also plan ahead by investing in additional plans like roadside assistance or 24 hour tow truck services, which can rescue in case of emergency breakdowns with little to no costs.
Of course, not all car expenses are covered by insurance policies. For example, most car insurance companies don’t cover routine wear and tear issues like brake repair, tire replacement, and engine failure. Therefore, you also need to plan for these expenses, for example, by starting a car repair fund or investing in auto repair and maintenance plans.
Lastly, car replacement is another top life expense to plan for in advance; according to Money.com, the average cost of a new car is around $50,000. Unfortunately, many people can’t afford to pay for such a figure out-of-the-pocket. Therefore, unless you want to finance your new car with a loan (leaving you in debt), you should plan ahead by setting up a car replacement fund.
4. Child Care
Raising a child is not easy, and it can be expensive too. According to the Centre of American Progress, a typical family spends around $16,000 annually to raise an infant. Of course, the course will increase over time as the child grows and their needs expand. Therefore, child care is another one of the top life expenses to plan for ahead of time if you want to avoid recurring financial problems.
One of the best ways to plan ahead of time where childcare is concerned is by saving. You can start setting aside money long before your child is born, which can cushion you against the expensive day-to-day childcare expenses once they arrive. You can even open a Dependent Care Flexible Spending Account, which you can use to save and pay for other expenses like daycare center fees, pre-schooling, summer camp, and after-school programs.
Of course, when planning for child care, you shouldn’t forget about education, which is another of the top life expenses to plan for ahead of time. Once again, you should plan early by starting an education fund as soon as the child is born. This is especially true if you plan to send your child to a private school. Furthermore, an education fund can also be a handy savings tool for your child’s college education expenses.
Lastly, you should consider your child’s health care expenses when planning for their future. And the best place to start is with health insurance; therefore, you should purchase a family health policy plan that offers good coverage to all family members. On top of that, you should consider opening a health savings account to cater for any unexpected expenses not covered by your health insurance.
5. Home Maintenance
Owning a home is a major investment, but it also comes with a significant financial responsibility. According to the National Association of Home Builders, homeowners spend around 9,240 per year to maintain their homes. Unfortunately, the home maintenance costs can even be higher when you add repairs and renovations. Therefore, you should consider your home when looking for significant life expenses to plan for in advance.
Like with many unexpected expenses, insurance is one of the best ways to plan ahead where your home is concerned. The good news is that you can invest in several insurance plans for your home, from homeowners insurance to flood insurance, earthquake insurance, and roofing warranties. These coverage options can cater to various home maintenance, repairs, and restoration costs, thus ensuring you don’t pay for the expenses out of pocket.
Besides insurance, you can also plan ahead of time by starting a savings account designated for your home maintenance. This can come in handy for expenses not covered by your home insurance policy. For example, you can use the fund to pay custom stainless steel fabricators when remodeling your home. Or you could use your savings fund to cover the down payment for a new home if you ever plan on moving.
Lastly, you should also consider unexpected appliance expenses when planning ahead for your home maintenance. For example, according to Angi, you can spend between $350 and $8,000 when replacing your existing appliances. On top of that, you’ll need to pay for regular repairs if an appliance breaks down. Unfortunately, home insurance policies don’t cover appliances’ normal wear and tear, so savings are the only way to plan for these expenses.
Relocation is another major life change that can throw your life into disarray, especially financially. According to Forbes, a local move can cost between $300 and $1,500, while you can pay between $2,500 and $5,000 (or more) for a long-distance move. Of course, paying for such moving fees out of pocket might be impossible, and thus, this is another one of the top life expenses to plan for ahead of time.
Unfortunately, unlike most expenses, you can find an insurance plan to cover your moving costs. Therefore, the best thing you can do is start saving early. This is especially true if you’re in a profession prone to sudden and frequent relocations, for example, if you’re a soldier or athlete. Therefore, by saving months or years ahead of time, you can easily weather the moving expenses like the cost of hiring a moving company, packing services, and moving insurance.
Relocation is not only limited to your home; sometimes, from time to time, you may also need to move your business to a new location. Once again, you should plan in advance by setting aside money for your business’ relocation. Of course, relocating your business will involve several costs, like hiring a moving company, rigging services for heavy machinery and equipment, new office branding costs, new business licenses, etc. Therefore, you must account for all these expenses when creating your business relocation fund to ensure you’re adequately prepared for the move.
7. Pest Control
It might not seem like it, but pest control services are another one of the top life expenses to plan for ahead of time. According to Forbes, you can spend between $100 and $8,000 to eradicate pests and bugs from your home. Unfortunately, the costs can even be higher if you have to repair pest damage to your home, which your homeowners’ insurance might not cover.
Of course, the best way to plan for pest control services is to save money in advance for any expenses. This is especially true if you live in an area prone to pests and bugs. As a result, in case of a problem, you’ll have an easier time paying for pesticides or hiring a pest control contractor for services like rodent removal.
Besides savings, you can also plan ahead by investing in pest management plans. For example, your local pest control company might offer quarterly, semi-annual, or annual bug control plans. Therefore, instead of hiring pest control services when a problem arises, a professional will regularly visit your home to inspect it and conduct pest prevention measures. Consequently, this will help ensure your home is free from pests all year round.
Of course, even as you plan ahead, you should also look for creative ways to save money on pest control. And one of the best ways to do this is with preventative measures, for example, keeping your home clean and storing your food properly. In addition, you should hire prompt pest control services immediately after you notice a problem, thus averting a situation where bugs get out of control or, worse, cause extensive damage to your home.
Major life expenses are normal; you can expect them to occur from time to time. However, most people don’t plan for them and thus end up being thrust into a financial crisis when they occur. Fortunately, the above are some of the top life expenses to plan for ahead of time, thus ensuring you’re not caught off guard.