This $1,000 Surprise Expense Made Me Glad I Have a Big Emergency Fund

Surprise expenses can happen at any time. Although I try to plan for as many costs as I can so I don't end up with a bigger credit card bill than I can pay, it's absolutely impossible to plan for every single thing that can go wrong.

In fact, my recent experience shows that even a minor incident on an ordinary day could lead to a big expense. Fortunately, because I have an emergency fund in a high-yield savings account, the incident didn't turn into a financial disaster -- although it easily could have.

Here's what happened.

How a minor mishap ended up with big costs

I recently had a very unfortunate minor car accident. I was driving my vehicle and got distracted talking to my husband when I was backing up and I hit a curb.

This shouldn't have been a big deal, but the curb was high and it hit my tailpipe in the wrong way and bent it. There was some other part attached to the tailpipe and, as a result, the car dealer ended up charging me just over $1,000 to replace the part so my car would be in good working order again.

This wasn't a big accident, and it wasn't something I had any way of anticipating could possibly happen. But, my car wasn't safe to drive after hitting that curb -- and I needed the vehicle to be able to get my kids to school and activities.

I would not have been able to wait weeks or months to get the car fixed until I saved up the money -- and since this came out of nowhere, it wasn't something I could have budgeted for in my monthly planning. It also wasn't really something I could have avoided (of course, I could have been a better driver, but this kind of thing can happen to anyone as you can't be perfect all the time).

Fortunately, I did not end up having to borrow or go without a vehicle -- thanks to my emergency fund.

An emergency fund exists to help you face unexpected issues

This wasn't the first time I've had to tap my emergency fund for an unexpected expense -- and I'm not the only one. Pew Trusts found as many as 6 in 10 households experienced financial shocks over a 12-month period, with 30% having to pay out for unexpected car repairs (like I did). Other common shocks included major home repairs, hospital visits, pay cuts, or divorce, separation, or becoming widowed.

The reality is, without money in a savings account, a one-time disaster that comes with a big price tag can have a devastating impact on your financial stability. If you have to go into debt to deal with your emergency, the monthly payments you have to make will end up stretching your budget later -- and increasing the chances of taking on additional debt.

To make sure you're ready if you hit a curb, or experience some other surprise costs, start putting money aside in your emergency fund today. You'll be glad you did when that unexpected expense hits your household.