Here is an interesting survey from the Pew Research Center – Americans Assess Their Saving Habits. A lot of the results are what you would guess:
- Most people (77%) say they are always trying to save money.
- Most people (63%) also say they aren’t saving enough.
- Housing, cars, and utility bills are the hardest to afford.
- Dining out, entertainment, and shopping are the most common areas that people splurge on.
What caught my eye was the section on unexpected expenses. About a third of adults say they had an unexpected expense in the past year that “seriously set them back financially.” Among this group, here is the breakdown of the top 4 most common expenses:
By these numbers, the average American this year will have:
- 11% chance of having a significant unexpected medical bill, and a
- 8% chance of having a significant unexpected car expense, and a
- 7% chance of having a significant unexpected housing-related expense
My conclusion? Expect the unexpected. It’s only February and we’ve already had unexpected family-related expenses in 2007. I think an allowance for such occurrences should be included in our budgets specifically, and not just reserved as a reason to use the emergency fund.
Do you budget for the unexpected? Or do you just let it happen and deal with the ups and downs?