Predict ‘surprise’ bills, no crystal ball needed
It doesn’t take much to upend many Americans’ finances. A car that won’t start, a furnace that dies or a trip to the hospital can leave households struggling to make ends meet.
According to the Federal Reserve, 44 percent of U.S. adults say they would have trouble coming up with $400 to cover an unexpected expense. Even families who have more in the bank can flounder. Surveys by The Pew Charitable Trusts found that 51 percent of families with at least $2,000 in savings reported trouble paying the bills after a financial shock.
Yet it is hardly a shock if an appliance wears out or a car breaks down.
It’s time to rethink what we mean by unexpected expenses. Some bills may be unpredictable in their amount or their timing, but they’re still inevitable. In other words: If you have a car, or a home, or a body, sooner or later it’s going to cost you.
A better approach, especially for households currently living paycheck to paycheck, is to save for the most likely costs and have some kind of Plan B to handle the truly unexpected.
Here’s how that might work with three of the most common unexpected expenses Pew found:
• Repairing or replacing a car (experienced by 1 out of 3 households that faced a financial shock)
• A major home repair (experienced by 1 out of 5)
• An injury or illness that results in a trip to a hospital (also experienced by 1 out of 5)
U.S. households spent an average $837 on vehicle maintenance and repairs in 2015, according to the U.S. Bureau of Labor Statistics. Most spent between 1.4 percent and 1.8 percent of their incomes on these costs.
Tuck aside $500 to $1,000 to cover a typical repair, and add to that cache as you can. Once you pay off your current car, redirect the payments into your repair fund. You can use any money you don’t spend on repairs as a down payment on your next car.
As a Plan B, keep space available on a credit card or consider a personal loan if repair costs outstrip your savings. For homeowners, a home equity line of credit may be a lower-cost option.
Home maintenance and repairs
Maintaining your home can
goal of collecting 4,500 pounds of food. Last year, the agency collected 3,600 pounds of food — more than double its original 1,776 pound goal.
“It is important to the Valley Forge Tourism & Convention Board that we support all of our residents in Montgomery County, especially those who are in times of need,” said Mike Bowman, Valley Forge Tourism and Convention Board president and CEO. “Through our annual Freedom from Hunger Food Drive, we continue to emulate the Pope’s giving spirit in an effort to give back, work together and create a vibrant and supportive Montgomery County community
where we live, work and play.”
The event is again being held in partnership with the HealthSpark Foundation — which is a private, independent foundation providing support to organizations that serve the unmet health and human service needs of residents living in and organizations serving Montgomery County, and the MontCo Anti-Hunger Network.
The food drive will accept all non-perishable food donations, but there are some items that are particularly needed this year, according to information on the event’s website. Among the pantry items that are in the highest demand: Tomato/ spaghetti sauce; whole, diced or crushed tomatoes; canned fruit in fruit juice; tomato and chunky soups (not chicken noodle); any low salt and low sugar products.
Collection boxes for nonperishable food will be located at the tourism board’s office, 1000 First Ave., King of Prussia, and at partner locations across the county. A listing of those locations will be made available on the organization’s website — www.valleyforge.org/hunger .
Monetary donations are being accepted this year for the first time, which will allow the Montco Anti-Hunger Network to purchase items to replenish the food pantries it serves. Those interested in making a monetary donation can visit www.valleyforge.org/hunger .