A new study by online lender MYJAR has revealed that unexpected payments have cost British citizens approximately £175 billion. According to the study which involved 2,000 participants, every adult Briton incurs £3,146 in unexpected payments over their lifetime. The study also reveals that the latest unexpected bill sets each Briton back £485 on average.
According to MYJAR’s spokesman, there are many studies on how much money people have, how much they save, etc. The study uncovers how unexpected payments accumulate over a lifetime to an incredibly high figure. The study also brings the importance of having an emergency fund to cover unexpected costs given that 50% of the respondents in the study stated that they were anxious about receiving unexpected bills. 10% stated they were extremely worried about receiving unexpected bills.
The study also revealed that the most common unexpected payments in Britain are absolute necessities such as expenses associated with a damaged washing machine or dishwasher. Parking ticket expenses are also among Britain’s top unexpected payments. The third most common expense is computer-related expenses followed by boiler, car damage, and dental surgery expenses respectively.
What’s more interesting is; more than 25% of all Britons adults have had to pay overdraft fees as unexpected expenses. This is a shocking statistic given the high fees associated with unexpected overdrafts. Pet related illnesses or injury also top the list of most common unexpected payments in Britain.
According to the study, Britons encounter unexpected payments at least three times a year, and 60% usually have no spare money to cater for the expense which forces them to spend money allocated for another expense. The study also revealed that 25% of Britons faced with unexpected payments struggle to pay bills that are £500 or more.
In an effort to take care of unexpected payments, most Britons turn to their savings, take short term loans like payday loans, borrow from friends and family or sell assets. From the study, it is clear that most Britons turn to friends and family first before taking short term loans or selling assets. 40% of the respondents in the study also stated that unexpected bills have left them struggling to cater for other necessities such as electricity, medical care, and gas.
Given the impact of getting unexpected payments, it’s important to forge a way forward. So, how do you deal with unexpected bills/payments?
Change your budget allocation: When you are faced with an emergency payment, your first step should be checking if you can change your budget allocation. If the expense is not as much, you can cut allocations from different expenses to raise enough money for the unexpected expense. You can slash your clothes, shoes or entertainment budget.
Split the cost: If the unexpected payment is too big to be catered for by re-allocating your monthly budget, you can consider splitting the cost over two months. Of course, this applies if you have the luxury of time to settle a payment. You can also choose to forgo something in your current budget for the next few months to raise enough funds to cover the expense.
Turn to your emergency fund: If you can’t change your budget allocation or split the cost, you can turn to your emergency fund. If you don’t have one, you should start thinking of setting one up immediately. Meanwhile, you can;
Take a payday loan: Payday loans are specially meant for taking care of unexpected payments/expenses. You can apply from a reputable payday loan broker like SwiftMoney to enjoy the best rates. Reputable payday loan lenders have the best lending practices as they are all authorised and regulated by the FCA. Apply online and get a payday loan within minutes.
Unexpected payments are increasing at an alarming rate in Britain. Most Britons worry about getting unexpected payments. Those that get them struggle to pay them. To avoid worrying about unexpected payments, you need to set up an emergency fund immediately if you don’t have one already. If your current emergency fund is inadequate, you need to refine your cash strategy and build a reserve that is capable of handling the most common unexpected expenses as well as other serious eventualities such as unemployment. Since you can never tell when you will be hit by unexpected bills, its better stay prepared.
Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.