What To Do When Unexpected Expenses Pop Up

We have all gone through periods when unexpected expenses pop up out of nowhere. And we all choose to react differently to these types of situations, based on a myriad of different things at play. Part of our reaction has to do with our past history with money. Another part, that determines our reaction, has to do with our genetic chemistry. And the final part has to do with how we CHOOSE to respond when these situations occur.

The Past

Our history with money is something that we really have no control over. Your past is simply your past, it helped to shape who you are now, and how you look at money and financial situations.

However, your past can have a serious impact on how you react to unexpected expenses popping up. This is where the term “knee-jerk reaction” comes from. I know that for me, personally, my knee-jerk reaction is always to go into irritation and anger mode upon the onset. But, usually, in less than a minute, I automatically shift into a serious problem-solving mode to figure this thing out.

Here is a good example of how your past can predict your reaction:

  • In the past, you have been in a spot where your secure income stream was suddenly taken away
  • You then had to scramble to figure out how to pay your bills and feed your family
  • What was your reaction to that situation?

However you chose to react previously, will give you a good indicator of how you would react if it happened again.

And this may, or may not, be a good thing.

More than likely, if you find yourself in a similar position again, then your previous reaction did not elicit permanent positive change. This is simply due to the repetition of similar experiences, which does not propel you further, but holds you back.

Technically, we are looking at the definition of insanity here. Insanity is doing the same thing over and over again and expecting different results. If you want to change your situation, you have to change your behavior.

Your past can have a serious impact on how you react to unexpected expenses popping up! Click To Tweet

Chemical Reactions?

And speaking of behavior, it is not just your past history that predicates it. How you react to unexpected expenses cropping up may have more to do with your genetic chemistry than your past.

The Journal of Molecular Psychiatry published a study that touches on this exact topic. What it shows is that some of us may react very differently than others, solely based on our brain chemistry.

I know that sounds a bit crazy, but hear me out. Even though we are all the same species, there can be some major differences between us when it comes to our chemical composition. It all comes down to the hormone and neurotransmitter, Norepinephrine.

Here is the gist of the study results:

  • If you have a LOWER level of the norepinephrine transporters (this means that you have a buildup of norepinephrine in certain parts of your brain) – you are much more likely to have a LOWER aversion to losing money.
  • If you have a HIGHER level of norepinephrine transporters (meaning your brain does not carry a buildup of norepinephrine) – you are much more likely to have a HIGHER aversion to the financial loss.

Falling into the latter category means that you may have a much stronger reaction to the loss. This can, in turn, make you more driven to regain financial stability rapidly.

Unfortunately, though, sometimes this reaction can actually make the situation worse due to hasty decision making. Therefore, no matter what your reaction, take the time to think it through carefully before making any rash decisions.

React Accordingly

You may not be able to control your past history or brain chemistry. But, knowing these things about yourself, and your past reactions can help how you react in the future. Take a look at some of the most common reactions and see which ones you have exhibited in the past:

  • Anger – I don’t deserve this, because I am a good person! Don’t you know who I AM?
  • Blasé – Whatever. Who cares. Money is a stupid human creation and it doesn’t mean anything.
  • Despondence – I am in such shock. I don’t know what to do.
  • Hurt – How could this happen to me? I am such a hard worker and a great person. Why did I get taken advantage of?
  • Hysteria – This is completely insane! It’s just too much and I simply can’t handle it.

Each of these common responses leads to some common reactions also. Some of which are healthier for your financial security. And others, not so much. The most common corresponding reactions are:

  • Anger – Quick, rash decisions. Usually not in their best interest and can cause more money lost.
  • Blasé – Will go on as if nothing ever happened and continue to spend money, but won’t make any moves to recover the unexpected lost funds.
  • Despondent – Frozen behavior. Very little to no action, due to lack of processing the information.
  • Hurt – Depression, withdrawal, very little to no positive action, spending more money to self soothe.
  • Hysteria – Usually elicits a combination of “hurt” and “withdrawal” reactions. This can cause yo-yo spending and saving sprees, which can spiral out of control.

Understanding which behavior(s) you have exhibited in the past, and the correlating reactions can help you change your future reactions. So this is a very important form of self-reflection that you should engage in so as to not repeat the same pattern over and over again.

Unexpected Expenses Game Plan

Please understand that I am not saying you shouldn’t feel what you feel. You absolutely should!

Feeling what you feel, and understanding the past reactions can only help fuel the fire to recover your financial security. Give yourself a day to go through all of the emotions and then come up with a game plan.

Assessing the situation is a very important part of potential financial recovery.

  • Take an in-depth look at what was lost, or will be due to no secure financial income stream.
  • Write down all of the numbers and be as specific, and close to the penny, as possible.
  • Then sit down and take a look at your regular bills.
  • Make a budget that incorporates your regular bills and saving as much as possible to recover your emergency fund.
  • There are some great apps to create a budget, such as Mint, Personal Capital, and Digit.

Once you have your proposed budget, then I suggest figuring out ways to side hustle. This means pick up as many side jobs as you can. Side hustles can end up being pretty lucrative. Plus, there are a lot of them you can do in your own time so you can create your own schedule.

If you have debt, work on paying that off first and then work on your savings.

However, a good rule of thumb is to always have about a 6-month cushion in your savings account. Depending upon your situation, this can be hard to do sometimes. But the more you have in your savings, the more of a cushion you have, and the more breathing room to recover.

Cut back on your spending, EVERYWHERE! Go back to living like you did in your early college years, because this will help you recover faster.

Although, based on your past history and your brain chemistry, you may be a person who reacts the complete opposite. If you feel as if you will never recover and start spending money like it’s water, then you are just digging yourself deeper. Just remember this is only a temporary setback and you will come out stronger. But only if you look at the situation differently.

Instead, do the opposite of your knee-jerk reaction. Put your head down, bust out the side hustles and keep your hands out of your wallet.

And another quick tip is to switch to cash instead of credit cards. This makes spending much more “real” when you use cash as opposed to a card. You will then be less inclined to spend money if you see it and feel it more. This can help you recover faster from the unexpected financial drain.

Eventually, you will come out of it. Hopefully, you will not only fully recover, but come out stronger and more financially secure.

What are some of the ways you have handled unexpected expenses? Did you come out the other side stronger for being in that situation?