Finances are a tricky topic for many people. Because even with all the best will in the world and exceptional planning, life can upend everything you’re working towards and leave you back at square one. And that doesn’t necessarily mean you did anything wrong per se, it’s life throwing you curveballs. And while your budget will likely accommodate things like rent, mortgage, utility bills and general household bills and expenses, situations can and do arise outside of these costs that can really place pressure on your financial equilibrium.

Let’s take a look.

Major Home Repairs

Property repairs are one of the largest financial commitments most households have. Especially if it’s getting older and starting to need some major upkeep, or if it experiences an unexpected disaster.

It might be your boiler breaking down in winter, or a burst pipe you didn’t expect, or your electrics failing and even needing new windows and doors. It’s not cheap. And while most experts suggest a repair fund of 1-5% of the property’s value, that’s not always feasible.

Home insurance can cover some types of damage, as can sinking funds or dedicated household repairs funds. But you might still find yourself out of pocket if, say, your roof fails or your fencing blows down in gale-force winds.

Sudden Loss of Income

While repair bills for various things can be frustrating, it’s not just another bill landing on your doormat or inbox, as the case may be, that throws you for a loop. Loss of income will do that to you, too.

Whether it’s via an illness, injury, redundancy or the death of a household earner, when you lose one source of income, you will start to struggle fast.

It impacts mortgage or rent payments, council tax, how much you spend on food, and whether you can afford kids’ extracurricular activities, and these expenses don’t disappear or adjust when your income takes a hit.

This is why many families explore different options to help soften the blow, and this is why families often look at how much does life insurance cost to bridge the gap and give them a buffer just in case this happens, not after it has already occurred.

In these circumstances, forward planning can help you out for short periods. Having 3 to 6 months’ living expenses put away, if you can accumulate this, will help massively, paying down debts before they become unmanageable and regularly assessing your income and outgoings helps too.

Emergency Household Expenses

Things fail, there’s no denying that, and they usually fail at the worst times. It’s the washing machine flooding the kitchen and refusing to work right in the middle of December when you’ve a million and one things to buy, its your kids losing their devices or breaking them or your front door suddenly deciding it doesn’t want to open or close anymore and you need a replacement and we won’t even mention overflowing drains outside threatening to flood the entire property.  

These situations can really put a dent in your finances, but using credit cards and taking out loans can help you cover the cost if you can afford the repayments, as can having household contents insurance or savings to cover some or all of the cost. Even a small safety net in these situations can be massively beneficial and help you avoid disrupting the rest of your outgoing life to afford to cover the emergency.