How To Handle a Surprise Bill When You Don’t Have Enough in Savings

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Even with good budgeting and careful planning, sometimes a bill comes along that surprises you, falling outside of the guidelines you’ve set for your finances and putting you in a tough spot. For many people, a common surprise bill might be medical expenses that your insurance didn’t cover, a veterinary bill or car repair. Sometimes even bills you knew were coming due can surprise you if they hit at a low point in your finances or if you’ve suffered any kind of financial hardship, as many people have in the wake of the COVID-19 pandemic. The first thing to do is not to panic. Here are some steps you can take if you can’t cover a bill with your savings.

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Especially if you need to buy yourself time to either figure out your next step or scrounge up more money, the first step after a surprise bill should be to call up the bill holder and negotiate for either a reduced payment, a payment plan, a delay in payment or other option. If it’s a credit card bill, MSNBC’s financial experts recommend you ask for an “accommodation” which could range from late fee waivers to reduced interest rate. For other bills, it never hurts to ask what can be done, especially if you have a legitimate reason for the hardship, such as job loss due to COVID-19.

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Related: 24 Things To Do When You Have More Bills Than Your Paycheck Can Cover

Slash Other Expenses

Chances are there’s somewhere in your budget you can cut back to free up the funds, or some of them, to start putting toward the unexpected bill. Think about extra streaming services or apps you don’t need right now (you can always repurchase later when funds are fluid again); money spent on take-out or coffee to go; high-end groceries; memberships you’re not using, especially in COVID-19, such as the gym or museum passes, etc. Just because you might have to cut these expenses back now doesn’t mean it’s forever, either.

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Prioritize Your Basic Expenses

The panic that can come with an unexpected bill might cause you to act rashly and pay it without thinking of what other bills are coming that you really can’t afford. According to money expert, Dave Ramsey, you should always prioritize what he calls “the four walls” — food, utilities, shelter and transportation. Pay these first and then see what’s left to pay toward the new bill.

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Read: 35 Useless Expenses You Need To Slash From Your Budget Now 

Seek Support

A surprise bill might leave you floundering in the dark, unsure what to do. Remember that you don’t always have to figure things out alone. A financial counselor can help you determine where to carve out the extra money you need and get you on a better track to develop healthier money habits while building up that emergency savings fund to provide a future buffer.

Find Out: 50 Ways To Live the Big Life on a Small Budget

Sell Something

You might be able to pull in some quick cash by selling things on such places as Craigslist, eBay or Amazon marketplace that are in high demand: electronics, old phones or iPads or other tech, furniture in good condition, old bicycles or gym equipment, clothing and so on.

Learn More: How I’m Sticking to a Budget and Spending Less During COVID-19

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Consider a Short-Term Money Loan

If you truly can’t find the money you need, you might have to take out a short-term, small money loan. Be careful with these, as they often come with high interest rates and unfriendly payment terms. But if necessary, you’ll be glad to have the option. Consider it an option of last resort after you’ve expended all other options.

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Redo Your Budget

A surprise bill can be a wake-up call to revisit your budget and make more room for expenses that aren’t currently on it. You could even add a “miscellaneous bills” category that accounts for the unforeseen. But more likely if you look closely at your finances, you might have been able to see the surprise coming and prepared your budget to accommodate it.

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Last updated: May 21, 2021