What statement best describes unexpected expenses?

What statement best describes unexpected expenses?

a. they can’t be planned for since they are unexpected.

b. they should be anticipated so that your budget can handle them.

c. they only happen to people who can afford them.

d. they don’t happen if you have a budget.

Answer: b. they should be anticipated so that your budget can handle them.

Emergencies are a fact of life whether these are in the form of car breakdowns or major illnesses, one can budget for the unknown, but one should budget for the unplanned. This statement is most suitable to describe the nature of the unpredictable expenses because it points out the impossibility of predicting them while stressing the necessity to be prepared at all times. Every plan to create a budget must have a contingencies section that marks unknown costs to be expected. For instance, the car’s battery may have run out, a body in the family may fall sick, or the household may need repairs at any one time. Thus, by saving a specific amount of money for the emergency systematically, you can predict and offset these kinds of surprises without significant negative consequences to your financial standing. This approach is far more sensible and realistic than believing that one cannot prepare for unpredictable expenditures (option a), that they only happen to the affluent (option c), or that they don’t exist as long as one follows a budget (option c). For example, if one decides to save a hundred dollars every month towards an emergency fund, within a year, one will be having a thousand two hundred dollars saved. Thus, this fund will help to provide money for unexpected expenses like a $500 car repair or a $300 emergency vet visit without using credit cards or loans. These finance tips encourage travellers to prepare for extras so that if they happen one is ready hence minimizing stress.