Note that an HSA account is different from a general emergency fund. Emergency funds are about general out-of-pocket expenses, not just medical-related. If possible, it’s a wise idea to have both.
How much emergency fund do you need?
For the elderly, health emergencies may result in long-term care – probably for the rest of his life. Meanwhile, for young adults with a family, medical emergencies are much more than the cost of illness. They can cause disability resulting to loss of income for a long time. Thus, you should save enough money to cover those expenses.
The amount of money you put in on your health emergency fund largely depends on the size of your family, income, age, and health status. But the first important thing you need to consider is your health insurance.
Understand your health insurance by figuring out what it does and doesn’t cover. Are there insurance limits? If so, how much? What kind of treatment and services will you be responsible for? Get some advice from your agent if you need to so you will know the best way to cover your needs.
How to save funds for medical emergencies?
As soon as you’re aware of your health insurance coverage and how much money you need to save for emergencies, the next thing you need to figure out is where to put your money. Keep in mind that the money you need to set aside should be liquid and should be kept secure. Thus, it should be accessible when you need it. The last thing you need is paying interest on your health emergency. Thus, never use credit cards to cover these kinds of expenses.
The best places to put your emergency funds are in the following:
- Money market fund
- Bond fund
- Interest-bearing checking or savings account
Don’t keep your money in anything that would charge you penalties for early withdrawals or any investment that has the potential for losses.
There are many ways in which you can save money. Here are some tips:
- If you can, ask your bank to transfer funds automatically into your emergency account.
- If you receive tax refunds or earned income credit, put the money into your health savings fund.
- Have your family on board with your emergency fund. Explain to them its importance and get them involved in saving on unnecessary spending.
Getting the best medical treatment is important. Protect yourself from health care expenses by purchasing reliable health insurance coverage.
Here at Roper Insurance Services, we are dedicated to helping you get the best health insurance out there for your needs. Get a quote from us for free and discuss how you can save on premiums with one of our agents. Call us at (828) 388-1851 or visit us today.