How to Handle Life's Unexpected Costs as a New Adult

Being a new adult can be exciting and overwhelming. You may have a lot more freedom, but you also have financial responsibilities that you never thought about before, such as shopping for groceries, paying rent, handling your taxes and making sure you have money in the bank.

You may also experience unexpected or emergency costs, such as a broken-down car or an urgent medical procedure. If you’re in a situation where you need funds quickly, you could consider taking out an emergency loan so that you can get the money you need and pay it back with predictable monthly payments at a fixed interest rate.

No matter what type of bills you’re facing, there are ways to afford what you need. Take a deep breath. Adulting isn’t always easy, but you can do this.

Create a budget

The best way to handle emergency expenses is to prepare for them as much as you can. That starts with creating a budget to ensure you’re saving enough to cover unexpected costs.

Look at all your expenses over the past month or two, including any bills you regularly pay and any spending on your credit or debit cards. How much money do you have coming in? Where is your money going? Do you see any areas where you might make changes?

Next, you’ll want to create a budget. Sticking to a budget is a key part of maintaining financial stability as an adult. If you haven’t made a budget before, now is the time to create one. There are a few common budgeting methods you could try, including:

• Zero-based budget: Assign all your income a role with a dollar amount until you get to zero, including monthly utilities, rent, food, gas and your savings.
• The 50-30-20 system: With this method, 50% of your income goes toward needs (rent, groceries, bills), 30% toward wants (dining out, streaming services) and 20% toward your savings.
• Envelope method: At the beginning of the month, decide how much you’ll spend on different categories, like gas, entertainment and groceries. Put that amount of cash into envelopes for each category. You’re only allowed to spend what’s in the envelope until the following month.  

Set up an emergency fund

As you think about how you're spending, consider starting an emergency fund so that you have savings available in case of future surprise expenses. You could set up your emergency fund in a high-yield savings account, which will help you earn a higher interest rate than a traditional savings account.

You could also set up automatic deposits from your checking account to your savings account once a month so that you don’t have to think about moving the money. Set aside what you can and add to your savings as often as you can — every small amount helps.

Look for extra work

If you have additional time in your week, you might consider taking on extra work to add a buffer to your savings in case of more unexpected costs in the future. Look for work you could do from the comfort of your home, like building websites or editing content. If you enjoy being out and about, you might look for food and grocery delivery opportunities or start your own dog walking service.

Ask for support

If you’re in a difficult financial situation, your friends and family might be able to help by loaning you money. If you do borrow money from someone close to you, make sure you put the details of the loan in writing, including the amount and the repayment plan. You don’t want any miscommunication or misunderstandings getting in the way of your relationship.

You could also seek help from non-profits and community services in your area or see if your city or state offer emergency programs by searching online or dialing 211.

Seek out advice

If you have a mentor or other adult figure in your life who you go to for advice, why not ask them if they have any tips for managing money and handling unexpected costs? The same goes for friends who seem to manage their money well — ask them what kind of tools they use to save, monitor their spending and pay their bills on time every month.

Building your financial know-how takes time

Facing unexpected costs for the first time as an adult can be scary, but there are ways to get through it. Track your spending, create a budget, set up an emergency fund, look for extra work and ask for help. Most of all, be patient with yourself as you learn how to manage your money and do your best to be prepared — you never know what life might throw at you.

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