A guide to saving for unexpected expenses

September 26, 2022

These strategies can help you stay the course when you have to dip into your emergency fund or money put aside for unexpected expenses or events.

We all have our monthly bills: rent, utilities, insurance, car payment or student loans. We all buy groceries and occasionally eat out. These are the normal expenses we have all come to expect, and we all plan our budgets around them.

However, we don’t always plan for the moments when the muffler falls off the car or an accident lands you in the emergency room. According to a survey, only 39 percent of people would be able to pay a $1,000 unexpected bill from their savings.

Whether you have a surprise expense you need to pay today or you’re just getting an emergency fund started, here are some ideas to consider when saving for unexpected expenses.

 

Work with credit card companies when an unexpected event occurs

Americans have an average credit card balance of $5,221, which can result in payments that take large chunks out of your paycheck. The burden of these payments can grow as interest builds, especially if you are behind for a month or two. 

There are options for working with your credit card lender to reduce your commitment, and many companies will be happy to discuss your options. You can ask them to erase past late fees, or even negotiate a reduced monthly payment that’s more aligned with your paycheck. Some of these options may affect your credit or credit lines, so be sure to research your options.

 

Sell your stuff to free up money for unexpected expenses

Gone are the days of yard sales for making a quick payday. These days, you can turn to ecommerce websites in order to sell your unneeded belongings. You can put last year’s wardrobe up for sale on auction sites, and make money selling your art on sites like Etsy and Ebay. You may even be able to sell some things via neighborhood-specific apps like Nextdoor.

 

Earn extra income to save for unexpected expenses

If you work a typical nine-to-five job, taking advantage of your free time at night and on the weekend can help build up additional savings to quickly pay off an unexpected expense. Consider traditional jobs — retail, customer service or the food industry — but also think about taking on smaller projects, such as participating in online marketing research or virtual paid focus groups.

 

Take on a short-term personal loan

Taking on a short-term personal loan from your bank can help ease the one-time cost of an unexpected expense. Consider small loans — $100 to $1,000 — that you will be able to pay back within a reasonable amount of time. These loans will allow you to spread the costs of an expense over a number of months, instead of forcing you to pay the amount upfront. Review the terms of any loan agreement carefully, especially the fees and interest rates you could be paying – some of which could be significant, depending on the lender.

 

Re-budget to live below your means

There are some expenses that you cannot avoid — housing, transportation and food — but you can consider cutting back on nonessential spending. The average American spends $2,913 on entertainment each year. While it is important to enjoy yourself every once in a while, cutting back on a few nights out or canceling one of your online video streaming services will show up in your bank account.

 

Ask for a paycheck advance to cover unexpected expenses

Depending on your employer, you may be able to get paid in advance for work you will be doing in the coming weeks. All companies are different, and you should talk with your boss, manager or a member of human resources about the specific company guidelines.

 

Make sure you’re prepared for next time by saving now

Whatever your unexpected expense, one or more of these strategies will at least help to get it paid off. Consider saving money for unexpected expenses in a high-yield savings or money market account going forward — having even a small amount saved in an emergency fund will help you when it comes to the burden of your next unexpected expense.

 

For more help, consider using a personal loan to cover unexpected expenses.

Related content

Your 5-step guide to financial planning

Military homeownership: Your guide to resources, financing and more

Are professional movers worth the cost?

Certificates of deposit: How they work to grow your money

5 financial goals for the new year

Allowance basics for parents and kids

Loud budgeting explained: Amplify your money talk

Checking and savings smarts: Make your accounts work harder for you

Dear Money Mentor: How do I pick a savings or checking account?

It's possible: 7 tips for breaking the spending cycle

Myths vs. facts about savings account interest rates

Healthcare costs in retirement: Are you prepared?

Multiple accounts can make it easier to follow a monthly budget

Don’t underestimate the importance of balancing your checking account

How to Adult: 5 ways to track your spending

Which is better: Combining bank accounts before marriage — or after?

5 tips for parents opening a bank account for kids

30-day adulting challenge: Financial wellness tasks to complete in a month

How to build a financial plan that covers your savings and expenses

5 ways to maximize your garage sale profits 

How a Health Savings Account (HSA) can benefit your retirement plan

Pet ownership costs: planning for the unexpected

Costs to consider when starting a business

Does your side business need a separate bank account?

How to track expenses

How to manage your finances when you're self-employed

Good money habits: 6 common money mistakes to avoid

Transitioning from the military to the civilian workforce

Saving vs. investing: What's the difference?

3 steps to prepare for a medical emergency

11 essential things to do before baby comes

Webinar: Uncover the cost: Starting a family

Preparing for adoption and IVF

How does money influence your planning?

College budgeting: When to save and splurge

How to save money in college: easy ways to spend less

How to gain financial independence from your parents

Practical money skills and financial tips for college students

Tips to earn that A+ in back-to-school savings

What to do with your tax refund or bonus

Pros and cons of a personal line credit

3 tips for saving money when moving to a new home

3 financial tools to help automate your finances

3 ways to keep costs down at the grocery store (and make meal planning fun)

5 tips for creating (and sticking to) a holiday budget

Financial checklist: Preparing for military deployment

5 things to consider when deciding to take an unplanned trip

Growing your savings by going on a ‘money hunt’

Working with an accountability partner can help you reach your goals

Why a mobile banking app is a ‘must have’ for your next vacation

How to decide when to shop local and when to shop online

5 myths about emergency funds

Does your savings plan match your lifestyle?

Uncover the cost: Wedding

Uncover the cost: International trip

Are savings bonds still a thing?

Tips to overcome three common savings hurdles

Adulting 101: How to make a budget plan

How having savings gives you peace of mind

Mindset Matters: How to practice mindful spending

How can I help my student manage money?

How to manage money in the military: A veteran weighs in

You can take these 18 budgeting tips straight to the bank

3 tips for saving money easily

Save time and money with automatic bill pay

How to best handle unexpected expenses

Stay on budget — and on the go — with a mobile banking app

Do you and your fiancé have compatible financial goals?

U.S. Bank asks: Transitioning out of college life? What’s next?

U.S. Bank asks: Do you know your finances?

U.S. Bank asks: Do you know what an overdraft is?

Personal finance for teens can empower your child

How to save for a wedding

Here’s how to create a budget for yourself

9 simple ways to save

How compound interest works

Dear Money Mentor: How do I set and track financial goals?

Lost job finance tips: What to do when you lose your job

Tips to raise financially healthy kids at every age

Money management guide to financial independence

First-timer’s guide to savings account alternatives

Money Moments: 8 dos and don’ts for saving money in your 30s

7 financial questions to consider when changing jobs

Travel for less: Smart (not cheap) ways to spend less on your next trip

What’s in your emergency fund?

Practical money tips we've learned from our dads

6 ways to spring clean your finances and save money year-round

How to cut mindless spending: real tips from real people

How to increase your savings

Bank from home with these digital features

What financial advice would you give your younger self?

Consolidating debts: Pros and cons to keep in mind

Spring cleaning checklist for your home: 5 budget-boosting tasks

Saving for a down payment: Where should I keep my money?

Beyond the mortgage: Other costs for homeowners

Improving your credit score: Truth and myths revealed

U.S. Bank asks: What do you know about credit?

Disclosures

Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, Home Equity and Credit products are offered through U.S. Bank National Association. Deposit products are offered through U.S. Bank National Association. Member FDIC.