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The Costliest Emergency Expenses

Brace for Impact

Reading Time: 4 minutes
By Ian Bin

When an unexpected financial emergency strikes, it can drastically impact your savings. Understanding the potential cost of these emergencies can be an essential step toward better financial preparedness. Here, we identify some of the costliest emergency expenses you could face to be better prepared when the time comes.

Medical Emergencies

High healthcare costs can easily top the list of expensive emergency expenses, especially in serious injury, chronic disease, or intensive care emergencies. These can swiftly run up high bills, making health insurance an essential safeguard. In the United States, an average emergency room visit costs $2,200 without insurance.1

This doesn’t account for other medical issues like dental or vision. If you need an emergency filling because you have a crack in your tooth or other minimal damage, the cost is typically between $100 and $250.2

Home Repairs

Damages to your home, whether from natural disasters or unexpected wear and tear, can pose a hefty financial burden.

This is particularly true in the case of crucial repairs, such as replacing a roof or repairing severe structural damage like cracks in the ceiling or the walls. Did you know that damage from hail, wind, or storm accidents on your house can cost between $2,662 – $20,715.3

Car Accidents

A car accident can lead to significant repair or replacement costs, especially if you’re the driver at fault and need to cover someone else’s repair bills. Added to this are possible medical bills and increased insurance premiums. Suppose it was a severe crash. The average collision repair cost can vary a lot and can cost as little as $50 or as much as $2,500 or more, depending upon if it’s just a tiny dent in the car or something more serious like a complete engine replacement.4

Legal Issues

Facing a legal issue can rapidly become a costly affair. You may think that legal fees do not happen to the average person, but that couldn’t be further from the truth. These fees can arise in various situations, some of which might include:

Litigation:

If you are involved in a lawsuit, either as a plaintiff (the person who is suing) or as a defendant (the person being sued).

Criminal Defense:

If you are charged with a crime, you will need a lawyer to defend you.

Family Law:

Issues with divorce, child custody, and adoption typically require legal assistance, which can result in substantial fees.

Estate Planning:

Preparing wills, trusts, or handling the legal aspects of inheritance may involve legal help and thus incur fees. Nevada averages $150 an hour to $350 an hour.5

Job Loss

It may not always be classified as an ‘expense,’ but the financial impact of job loss can be massive. This can put pressure on savings as living expenses because you expect to pay for things like rent/mortgage, food, and more while having no income. Therefore, your everyday expenses can quickly drain your bank account if you are not prepared.

Unexpected Travel

A sudden need for travel can become a significant expense, whether for a family emergency or other unforeseen events like a funeral. Flights, accommodation, and other related expenses can be very costly. The average airfare for a roundtrip flight within the U.S. is $367.79.6 However, this can change depending on the airport and distance of the flight. You will also need housing wherever your journey may take you. The average rate for one night in a hotel across the U.S. is $155.7

Soften the Blow

While we can’t predict every emergency, understanding these potential financial setbacks can spur proactive planning.

You can soften the blow of these high-cost emergencies by building an emergency fund, getting adequate insurance, maintaining financial agility through diversifying income sources and investing wisely. Financial preparedness is critical to navigating the stormy seas of life’s most expensive emergency expenses.

Take the First Step

Saving for an emergency fund can be stressful due to all the demands already on your income. Hopefully, you can see the value of such a savings goal. But rather than just tell you it’s important, we can help you save for it as well. With 3Nickels holistic financial advice, you can include an emergency fund as one of your goals. Then tell us the priority of each goal and we’ll devise a plan to help you reach them.

The first step is to download the app. Create an emergency fund goal, telling us the amount and when you want that available by. For example, let’s say you’ve set a goal to save $8,000 within a year, marking it as a top priority. But six months down the line, you find yourself dreaming of a vacation.

In this scenario, 3Nickels adjusts its advice to better suit your evolving priorities. While still emphasizing the importance of contributing to your emergency fund, it might suggest extending your timeline to three years and aiming for a more manageable savings target. 3Nickels is here to help you tailor the perfect plan that aligns with your priorities.

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