How to Plan for Unexpected Expenses While in College

This article is brought to you by GradGuard. We protect college students and their families from the financial risks of college life, like providing a refund for tuition or replacing a stolen backpack when your school may not. When the unexpected happens, GradGuard’s tuition insurance and renters insurance can help you get back on track.

Regardless of how well you plan your finances, it is unfortunate that unexpected costs are bound to pop up every now and then. While there are things you plan for, such as your college tuition, rent, and other regular bills, these unexpected costs are just that–unexpected. These could be emergency costs such as medical or vet bills, or common occurrences such as car troubles or taxes. That being said, there are still actions you can take to plan for these unexpected expenses while in college to the best of your ability.

via Pexels

Budget

The first thing you need to do is budget properly. While you may already have a budget in place, be careful that you are not using all of the funds you acquire. You should always add money into your savings, or in this case, your emergency funds. This does not have to be a lot, as it will add up over time. Reevaluate your budget and see how much you can tuck away into your emergency savings. This can be $20 a month or 20% a month, whatever you can manage.

Now, it is imperative that you do not touch your emergency fund for any reason. This is much different than your regular savings that you may end up dipping into on a rainy day or for a concert you want to go to. Whatever you do, do not touch your emergency money until you absolutely need to for these unexpected costs. If you use it all up before an unexpected cost arises, it will have defeated the purpose of setting this fund up.

Save as Much as Possible

Now that you are budgeting for your emergency funds, it doesn’t hurt to continue to save as much as you can. This includes buying store-brand groceries, preparing food yourself instead of eating out, and sharing costs with your roommates or friends if applicable. This may allow you to add extra money to your emergency funds every month.

However, even if it does not go into your emergency savings, having extra money can still help you with unexpected costs. Maybe it’s not an emergency, but rather a parking ticket. Its cost may not require touching your savings if you have the extra money prepared for situations like these. Once again, every little bit counts, even if it is just saving a dollar here and a few cents there.

Protect Yourself

Next, you should really protect yourself as much as possible against unexpected costs. Take, for example, something completely out of your control happens to you or your apartment: a flood, a broken tree, or even a robbery. If all of your valuables are gone, it will be very hard to pay back this extremely unexpected expense.

Luckily for you, GradGuard has you covered. They have both renters’ and tuition insurance at the lowest fees to other comparable plans. Not only that, but they protect you against certain perils such as theft and fires and will replace your personal property if one of these perils were to occur. GradGuard is aimed specifically at college students on a budget, much like yourself, who want to be as prepared as possible in the event of an emergency.

By protecting yourself with GradGuard, you cover your bases for these unexpected expenses and save so much money in the long run.

You can also protect yourself by looking into care plans for valuables such as your computer. They may be expensive up front, but laptop repairs can be very costly! Having paid for this type of insurance can cover everything you need under regular wear and tear.

Pay Bills on Time

Lastly, in order to plan for unexpected expenses, you need to pay all of your bills on time. By delaying them, you will gain interest which will greatly increase the amount you owe, especially if your interest rate is high. You should pay your bills as soon as you are able so that money does not fester and end up causing you pain! This will help you keep your regular costs down while planning for surprising costs down the line.

This can also help you increase your credit score which may help you depending on the expense that pops up. If you need a personal loan, the bank will directly look at your credit score and will be more likely to loan you money the higher it is. However, a personal loan should never be your first plan to help yourself with an unexpected cost, as they will have very high interest rates and will be very difficult to pay off. However, it is an option if you really need it.

By following these steps, you will slowly build up an emergency fund and keep yourself protected for when these surprising expenses pop up. If you plan and save and do not touch your emergency fund, you will have money tucked aside when you need it.

It’s no secret that college costs a lot of money. Make sure your investment in higher education is protected with GradGuard. Our affordable tuition insurance and renters insurance plans are specifically designed for college students. Customizable plans make it easy to protect your tuition, room and board, laptop, bike, and so much more.