Expense Risk

Expense risk refers to the potential for unexpected costs that can arise in personal or business finances. It involves the uncertainty around future expenses that might exceed budgeted amounts, such as sudden repairs, medical bills, or economic changes that can increase prices. Managing expense risk is essential for maintaining financial stability, as it helps individuals and organizations prepare for unforeseen financial burdens, ensuring they can cover necessary costs without derailing their financial plans. Effective budgeting and emergency funds are common strategies to mitigate this risk.