Everyone has big expenses from time to time which can have a big impact on your financial situation – this is particularly true if it is an unexpected cost which you do not have time to prepare for. Not everyone has a rainy day fund that they can tuck into but there are a few ways that you can budget to cover these big expenses without it impacting your finances too much.
Create a Budget
First, it is a smart move to create a household budget which will help you to gain control of your finances. This needs to include all of your regular outgoings as well as your total income and you can then work out a percentage to spend on essentials (rent, food etc), non-essentials and savings. This can help you to set aside a little bit of money each month to cover large expenses when they occur.
When you draw up a budget which lists your monthly expenses it allows you to identify ways in which you could make savings. You can eliminate any unnecessary spending and then look to make savings with other purchases. A few ways to do this include:
– Shopping at a cheaper supermarket
– Buying non-brand groceries
– Switching energy provider
– Buying Second-hand
You could also look to find ways to boost your income to make big expenses more affordable. This does not necessarily have to involve taking on a part-time job as you can earn money online, sell items that you do not need, rent out a spare room etc. This is a good option if you are able to because you do not have to change the way in which you live.
You may find large expenses easier to manage if you can arrange a finance deal. If you are buying a used car, for example, then dealerships like FoW can arrange a monthly payment scheme which helps you to afford the car that you want without taking a huge financial hit. This can make it much easier to manage financially particular when you factor in the various other running costs that a car has, including fuel, insurance, road tax and maintenance. Alternative, you could look to take out a loan to cover a purchase like this which again can make it easier to manage through monthly repayments.
Big expenses can cause a huge problem for many households particularly if it is one which is unexpected. Getting greater control of your finances so that you are able to set aside money each month is the best way to cover these expenses, but there also other options available which can help you to manage these expenses without them impacting your life too much.