5 Common Emergency Expenses — And How Much They Cost on Average

5 Common Emergency Expenses — And How Much They Cost on Average

Cindy Lamothe    GoBankingRates  Fri, June 7, 2024

One thing in life is certain: things are unpredictable unimaginable ways. While you can’t know what the future holds, you can plan for it. Because being unprepared can drain your emergency fund empty and leave you in the poor house.

“If your car breaks down, the cost to fix it can vary greatly,” said Melanie Musson, a finance expert with Clearsurance. “If you have a flat tire, you may need to replace all your tires, which will cost about $600 or more. However, you can expect to pay $2,000 or more for a replacement if your transmission goes. A new radiator will cost around $1,000. If you need a new battery, you have an easy fix for about $100.”

Justin Godur, financial expert and CEO of Capital Max, says understanding these common emergency expenses and their potential impact on your finances is essential for effective financial planning.

“By anticipating these costs and preparing accordingly, you can protect your financial well-being and avoid significant stress during emergencies.”

Below, experts outline exactly how much some of these common emergency expenses will cost you on average.

Car Breakdown

“A car breakdown is one of the most frequent and costly emergency expenses,” Godur said. “The average cost for a major car repair, such as a transmission or engine replacement, can range from $3,000 to $7,000.”

He says even minor repairs, like fixing a brake system or replacing a fuel pump, can cost between $300 to $1,000.

“Regular maintenance and an emergency savings fund can help mitigate these unexpected costs,” Godur said.

Job Loss

According to experts, losing a job is a significant financial shock.

“The average duration of unemployment in the U.S. is about 22 weeks, during which time individuals need to cover living expenses without a steady income,” Godur said.

Musson notes the same.

“If you lose your job and are eligible for unemployment, you can expect to lose half of what you were making,” Musson said. “Unemployment services are a nightmare to work through in many parts of the country, so you can expect to have a lag time of several months, during which time you’ll have no income. So, if you were making $5,000 a month, in a best-case scenario, you’d lose $2,500 a month, and in a worst-case scenario, you’d lose $5,000 a month.”

Godur says that depending on your lifestyle and location, this could mean needing between $10,000 to $20,000 to stay afloat.

“Building an emergency fund with three to six months’ worth of expenses is crucial to weather such storms.”

To Read  More:

https://www.yahoo.com/finance/news/5-common-emergency-expenses-much-140111547.html