Pre­dict ‘sur­prise’ bills, no crys­tal ball needed

The Mercury (Pottstown, PA) - - BUSINESS - Liz We­ston Nerd Wal­let

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)

Car re­pairs

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 .

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