Saving is easier when you have a clear goal in mind; whether it’s buying a new house, revamping your kitchen, or taking your family on holiday. What’s not so easy is saving for saving’s sake; when there’s nothing driving you to grow your nest egg.
However, when it comes to your finances, expect the unexpected! Surprise costs can be planned for – you just need to identify what costs you could encounter, so you can get on track with building your rainy day fund.
Some costs to consider include…
We’re all guilty of ignoring issues in the hope that they’ll go away, yet problems with our teeth tend to be persistent - not to mention painful. A standard check-up on the NHS is currently priced at £19.70*; but more complex treatments – such as crowns or bridges – will set you back £233.70. And if you opt for private care, you should expect these costs to be much higher.
Studies show that running a car is becoming increasingly expensive. Take insurance, for instance: premiums rocketed by 14% between Q1 and Q4 2016, Confused.com’s latest car insurance price index* shows, meaning drivers now face an average bill of £767 for comprehensive cover.
Car insurance, tax and MOT are standard annual costs, but it’s also important to account for possible car emergencies, particularly if you rely on your motor from day to day. If your clutch goes or battery dies and you need a quick fix, you’ll need to have money at the ready.
Owning a pet
They may be cute, cuddly and great company, but our little furry friends certainly nibble and gnaw into our finances. According to charity PDSA’s Animal Wellbeing Report 2016*, a dog costs £21-33k over its lifetime (depending on size); a cat costs £17-24k; and a rabbit costs £10-15k – that’s before vet bills are considered. Even if you’ve protected your pet pal by taking out insurance, there could be certain procedures your policy doesn’t cover.
Emergency home maintenance
The average cost of running a three-bedroom house stands at £1,634 per month, an infographic* published last year by More Than reveals, with maintenance costs making up £55.41 of the total. If you own your home, you would have already budgeted for these costs; but do you have spare cash to cover potential household calamities – a burst pipe, for instance?
Saving for kids
A Natwest study* from January 2016 claims that raising a child to 17 years old costs £192,187.03 on average. The figure is enough to make any mum or dad’s eyes water; but spread across so many years, it becomes manageable.
What can be a shock to the finances, however, are the unforeseen expenses. When your little one comes home and presents you with a letter for next year’s ski trip with a huge grin across their face. It’s these costs that require us to have surplus money set aside.
So, what next?
Now, with your list of possible surprise costs, you can start putting some money away. At this stage, you could look at managing your finances by setting up care plans for pets or maintenance plans for things like your boiler. This way, you’ll know exactly how much your costs are each month and won’t get any nasty surprises.
Inspired to build your rainy day fund? Our handy Healthcheck Tool can help you get on track to achieving your long-term financial goals – and it only takes a few minutes to complete. Then all you have to do is go and make it happen!
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