Wednesday, February 21, 2007

Unusual Expenses

Jonathan at My Money Blog just posted about the impact of unexpected expenses on people's savings. His sage advice? "Expect the Unexpected," which is a good idea given the stats he quotes on how many Americans are hit by unexpected medical, car, and housing-related expenses.
I've been thinking about this a lot lately-- I had one somewhat unexpected expense recently when I had to go to the dentist to have a filling replaced. That only cost me about $200 after the insurance reimbursement, so it's nothing compared to the kinds of medical and dental expenses that some people face. I have a friend who seems to have dental emergencies cropping up every other month, especially when she also has other stresses in her life: when she broke her ankle and was having to take car services a lot, she suddenly needed a root canal. When she lost her job, she needed to have a crown replaced. When she moved back to her home country and was trying to re-establish herself there, needing to buy a car, rent an apartment, set up phone service, find a job, etc., boom, she needed yet another root canal. Part of the lesson to be learned from her is that you really should take care of your teeth early in life even if you think you can't afford it, because the problems you'll have later on will be much more expensive.
I've been spending so much money on my home lately, I've been worried about the other big expenses that might hit, whether or not they are truly "unexpected." I just renewed my gym membership, which was $999 for 14 months. It's cheaper to pay up front than monthly, and obviously a gym membership falls into the category of "luxury," not "catastrophic expense," but still, given my recent cash flow patterns, I wish I could have waited a few months to pay that. Of course, I probably could have-- I still have a couple of months left on my current membership and I only renewed now because they said they were having a sale. And when a gym says a sale is ending tomorrow, there is a 99% chance that means another sale is starting the next day. But I figured I'd rather renew when they say they are having a sale than risk waiting and be stuck with them telling me the one day they aren't having a sale is the day before my membership is expiring. So with that, a couple of train tickets, and $450 I spent the other day to have some oddly-sized posters framed, my next credit card bill is going to be a whopper!
The problem is that when you have these "one-time" expenses, you find yourself thinking, "oh, it's okay, I don't do this every day..." but if you're not careful, you end up having large "one-time" expenses several times a month, and before you know it, your savings account is empty!

1 comment:

Bernard said...

hahaa...I have the same experience as well on the gym membership! Well, going strictly on the financial sense, gym membership can be consider a "luxury item". You know there are cheaper or no cost ways to keep fit than paying for the gym fee. But yeh, health is more important than wealth, right? :-) But you are right, we have to be mind of all these expenses.