Enjoy this post from my blog friend Natalie. Emergency funds are extremely important, especially in the case of a medical emergency where you have to pay a large amount out of pocket.
A few weeks ago, I had one of the scariest things happen to me.
My long-time partner and boyfriend began to start getting really sick. This wasn’t just a case of a fever and the sniffles.
The symptoms were a little bit more serious than that. He began to get severe stomach pains along with a completely loss of interest of eating or drinking.
I will spare you the more gruesome details but it got really bad. It finally ended with his fever spiking to almost 103 degrees and me rushing him to the emergency room of the hospital.
My boyfriend is one of these people who you would never consider being sick. He is one of these people who barely gets a cold. In his work, he works with carpentry materials to help repair homes in the area. This line of work also requires him to lift heavy materials and do lots of physical work. His physical health was so good that it knocked us all by surprise.
Suddenly he was extremely lethargic and could not even get out of bed. The once fun-loving person that I knew was being taken over by some invisible and frightening ailment.
The night I finally took him to the emergency room, my boyfriend was in a state of panic.
He was worried about the financial aspect of him having a medical issue.
His fever was out of control and he could barely stand up. He was also in a state of panic because of the costs that would be incurred from all the emergency room bills. I told him to basically shut his mouth up over those types of thoughts as his first priority should be his health.
I didn’t fault him for having thoughts like these.
We just happen to be a couple that care a lot about money and we both work hard to be financially stable. When something like this happens, many would feel unsure about how they will pay such medical costs. This is certainly true in the United States.
My boyfriend was lucky enough to be immediately seen by the medical staff. They ran a series of tests and discovered that his colon was very inflamed. Under the doctor’s orders, his health had been deteriorating to the point where it was decided that being hospitalized was the only option.
My boyfriend’s reaction went into further panic as he realized what this meant especially for the finances.
I tried to convince him of otherwise as I knew stressing out could only make his condition worse. He was placed in a hospital room where he could be monitored by the professional staff.
For the next couple of days, my boyfriend was given several procedures and medications that at first did nothing. I went to the hospital every day and tried to console my boyfriend through this difficult time.
He once again expressed his fears of the cost of being in the hospital. I let him know that there is not enough money out there to replace someone’s health. I also reminded him that we had an emergency fund that was precisely for occasion like this as this was a bona fide emergency.
There is no bigger reason to have an emergency fund than in situations like this.
You just never know when the proverbial crap will hit the fan and require you to have liquid assets available.
We had absolutely zero notice that something like this would happen. Medical situations are one of those things that usually pop out of nowhere and can be very destructive if you are living on the financial edge.
The truth is there are too many people out there that are living paycheck to paycheck. Too many people do not think of having a form of savings as a priority and nothing could be further from the truth.
I once had a friend that had some major complications due to her high-risk pregnancy. She never took the time to save as she felt it more important to buy nicer handbags and other pricey things.
As a result of no savings or health insurance, she winded up with over $15,000 in medical bills.
The resulting stress on her psyche and family caused her even more health problems and later more health bills. She applied for government assistance and was given some help after a big battle with paperwork and authorizations. She could have avoided a lot of stress if she had saved something in advance.
As I write this, my boyfriend is still recovering from the hospital and will hopefully be home soon. He finally accepts the fact that it will not destroy us financially since we have a savings fund and health insurance that has a set limit on what we are liable to pay.
Being able to concentrate on what is important is such a relief in times like these. It has literally helped me sleep at night. I can’t imagine what we would be doing without it.
Having an emergency savings account (Do you know how much you should have? – I have a related post on this on Diversified Finances) is of utmost importance especially in a world that guarantees nothing.
Taking the initiative to do something for your financial future is crucial. Learn from my own story because you just never know when you will need money now. My boyfriend and I are able to focus on plans to get him back to normal health and that is what is important. Please take the time to prepare for life’s unexpected pitfalls so that you don’t end up in the financial hole.
This is a post by Natalie over at Everything Finance. Everything Finance is a site about just that, everything related to finance. You can get information about investing, saving money, insurance, shopping, blogging, CD rates, and making money online.
Do you have an emergency fund? What does it cover?
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We have an emergency fund (although in the form of invested cash and available credit). Most emergencies tend to be small enough to cover by next month’s income (car breakdown, boiler explodes, etc etc).
Where this isn’t the case, we would have to liquidate some invested funds. Although this increases our risk a little, we deem it worth it. Losing out on 6-8% per year in the long-term by keeping 6 months expenses in cash when its probable that we will never need it isn’t really worth the risk.
We have an emergency fund. It isn’t huge but I think it should cover some of the bigger repairs on our house, or a medical emergency. However, we have a fairly solid health insurance policy from our employers so I am not too stressed out by medical emergencies. I guess you never know though.
His insurance plan isn’t great but he does have a cap on what he has to pay out of pocket. It helps because he is going to need a lot of medical treatment.
Emergency funds are extremely important. We’ve had some expenses lately and it’s nice knowing we have a backup emergency fund.
Yes, it is. Very nice.
Yikes, I’m glad he’s OK now and getting better.
This is my own opinion but it’s situations like this and people like your BF where Obama’s ACA comes in handy.
Have you looked into picking up some medical insurance?
He has medical insurance. It is going to help a lot in this situation.
Thank the Lawd!
I”m a huge advocate of emergency funds, but even more so for health care. I have an HSA that I contribute the max allowable to. I’ve had two surgeries the past two years and this year my wife might have a surgery and I have an expensive radiology appointment in a couple days. All the stuff I described came out of nowhere and was not preventable. I feel so much better when neither of us has to factor in cost to medical care. We simply plan on contributing the max to our HSA and if we need it we use it.
Glad you have that plan. Hope your treatments work out.
ah so scary – hope he gets better soon! agree that an emergency fund is necessary. we have some bills that we could pay off but instead it was important for me to build up our emergency fund. we had some house issues last year and had to use our emergency fund until we could be reimbursed by insurance months later. thank goodness the money was there because we had to pay for things right away!
— jackie – jade and oak
I am sorry to hear that. Glad it worked out.
Hope your boyfriend recovers soon. How scary!!! You know though I would totally be thinking the same thing about money if I had to go to the emergency room. I know it’s terrible and should not be that way. Even with an emergency fund I’d be thinking about it. 🙁 But you’re so right in that you never know when stuff like that will happen.
I think a lot of people would. Its a really scary lace to be in.
I have an emergency fund. It is not anywhere near being fully funded though.
As long as you are working towards it, thats what counts.
I have an emergency fund and the main reason I have it is for medical expenses. I’d like to get it to $5,000 which is my deductible for the year so that if something really bad happened and I needed to spend that much I could. I think health is a huge priority so having an adequate emergency fund is one of my big goals!
Very true. Good luck with that goal.
There are many costs in our lives we can plan for, but a big unknown and surprise is healthcare costs. No matter how good we feel today, we have not guarantees on what could happen to us tomorrow. And when these surprises happen, they tend to be VERY expensive. Surprise healthcare related costs are a big reason I push for very robust emergency funds for my clients.
I certainly can attest to that. Best to be as prepared as possible.
I’m currently building my emergency fund, I know how important to have an e-fund. We don’t have any idea what will happen in the future, so better if we are well prepared.
Very true.
I have maybe 3 or 4 months of expenses in an emergency fund. I’d like to have an entire year but I haven’t worked steadily in quite a while.
I’m glad your boyfriend is recovering and don’t forget that you can absolutely negotiate your bills with the hospital, and you can challenge your insurance company for whatever they won’t pay.
Good luck!
In my country, even if I am paying for the ‘state’ insurance, I get almost nothing in return (I call nothing bad hospital conditions and having to bribe people left and right to get a decent service), so having an emergency fund for such issues is indeed important, otherwise you’d get into a lot of trouble 🙁
Yikes. Really wish the best to your BF. My husband’s parents were in an accident a few years back (before we even met), and while they had insurance, the insurance company had to be sued in order to pay out. It was okay as far as bills were concerned, because they were going to get paid eventually, but when you figure in the costs of paying for everything else, having some extra funds around just so you can pay other stuff (like, say, groceries) while all this is going on is totally key.
We have a really high deductible, so I always think about costs first as well, although there is nothing better than being able to turn your care over to someone who knows what they are doing. When we took our daughter to the ER last year, it was the best feeling not to have to keep second guessing myself. I think lots of people stay home until they just can’t stand it anymore and that essentially drives up the cost because the ER is that only option in many cases.
Normally I would love to have an emergency fund ! But my budget has gotten so tight lately there is even enough left over unless I save $5 a time. But I do agree that its important emergencies are less stressful if your prepared
Wow! What a story 🙂 Thanks for sharing that!
My husband and I do have an emergency fund and they are for this exact scenario.
That part of our savings doesn’t ever get touched. We are hopefully planning to have a baby soon and when that happens, we want to increase our emergency fund even more.
Additionally, we also have our life insurance policies. It’s definitely for the worst of emergencies, but we want to make sure that we have everything covered in case life throws us curveballs.
I started working on my EF in October 2013. My goal is to have 1000 EUR and I have 400 EUR so far. Considering costs of living in Europe, it’s not much but I’m happy that I started. I know that time works for me and I’m glad I haven’t had any situation so far when I had to use it 🙂 All the best for him, I hope he will get better soon!
Emergency funds are critical–especially when you can get your debt down to a reasonable level (if any.) But this story is a big reason why health insurance is so important. I’m sure your BF will find out that this experience could have cost over $100,000 if he didn’t have insurance. In fact, I’ll bet that most of you know that most bankruptcy’s are caused by huge medical bills that can’t be paid. Once you have at least basic coverage then an emergency fund is very important. But as a self-employed person my husband and I have the HSA account which is both a retirement account AND a health savings plan. This allows us to put an amount in savings each year and to use that money essentially tax free for valid medical expenses. And trust me, valid medical expenses include dentistry and all sorts things not covered by insurance. If you don’t use it, it just builds so it is effectively a great emergency fund too. I strongly recommend it!
Since we have an HDHP with an HSA, we use that as our emergency fund for medical expenses. It’s pre-tax money, which is awesome, but with the HDHP any expense is usually a couple hundred dollars at the minimum. Since we’re healthy twentysomethings, it doesn’t create too much of an issue though.
Health cost seem to be one of my biggest expenses right now and it’s usually the one that blows my budget way out of proportion. Most of this is due to the crappy health insurance policy I have. This has left me using my savings to keep ahead of these bills. I’m glad to have my savings or I would definitely be in a world of hurt right now.