Prime Directive: You need healthcare

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Healthcare is expensive, there’s no way around it. Unless you’re a financially independent multimillionaire who can afford to pay tens to hundreds of thousands of dollars without blinking an eye if you or your family’s health takes a hit, you need health insurance. Period. 

Sure, if you’re a young, single 20-something you may feel invincible. You argue you’re trying to build a new business or work as a contractor or at a small firm that doesn’t offer health insurance and are thinking about going without. DO NOT DO IT. Just don’t. 

Accidents happen. Unfortunate surprises pop up. An ambulance ride alone can cost $1000 – even with people with insurance! God forbid you’re diagnosed with a new chronic medical condition. 

Healthcare premiums are about $3000-4000 per year for young folk – you can get your estimate here –  Kaiser’s Health Insurance Marketplace Calculator.  That’s a small price to pay to mitigate a possible looming financial disaster if anything happens to your health. 

Yes, yes, it’s expensive. We get it. Yet, it’s definitely worth it. 

ER visit? With insurance, it’s at least $100 just to walk in the door. Then the lab work, imaging studies, etc. Insurance usually will pick up 60% or more of that cost. Without insurance? ER visit for a minor problem (e.g. have a small laceration) will cost you at least $1000 out of pocket. Annual check up? Usually free or only a small co pay $40-60 per visit. Without insurance? Try at least $200-300. 

Now if you’re healthy, just go for annual check-ups, does a few episodes of care make up for that $3000-4000 / year price tag for health insurance? Yes. Again, you don’t know when bad luck will strike, so going without is not a good idea. This is a prime directive. 

Need some health insurance? Check out – https://www.healthcare.gov/

COVID-19 and why you need an Emergency Fund

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As I write this, we are in the middle of a global crisis. COVID-19 has engulfed the planet. Hundreds of thousands of people have been inflicted resulting in thousands of deaths. Not only is COVID-19 wreaking havoc on the lives of countless people across the world, it has also wrecked national economies. Businesses have lost millions in revenues. People have lost their jobs, have been forced to take unpaid leave or have had their paid hours cut back.

The U.S. gig economy has been tested like never before, and is showing signs of buckling under the pressure, as unemployment in the U.S. has hit all time highs. To buoy this sinking ship, the federal government has crafted a massive bailout.

Still, those living paycheck to paycheck are in deep trouble. According to a 2017 study, 40% of Americans couldn’t come up with $400 to cover an unexpected expense. This does not bode well for those workers affected by COVID-19.

But the Citizens of Moneyland should easily be able to weather this economic storm. We citizens understand that we need an emergency fund to cover at least 1-3 months of living expenses, ideally 3-6 months. This is a high impact directive. Our realized citizens will have at least 3-6 months of living expenses saved.

Directive: You Need an Emergency Fund

Photo by Hush Naidoo on Unsplash

Why is this important? Because it’s critical financial insurance against the uncertainties of life. Insurance against all the COVID-19 crises, the car repairs (or fires), the puppy’s vet bill, the inevitable surprise medical expense, and the myriad of other unexpected bills that pop up without warning.

COVID-19 and life’s other emergencies will hurt less if you have the financial security to protect against them. An emergency fund is an essential blanket you need to weather life’s storms. It is a must have and a prime directive of our leader. Fully realized citizens of Moneyland will have an emergency fund of at least 3-6 months.

How much should I save?

Start small. Fledgling citizens may try to save up at least 1-3 months of your essential monthly spending. This includes rent, food, debt obligations, and utilities with a little extra cushion just in case. Fully realized citizens should have at least 3-6 months saved.

Where should I keep this emergency fund?

Not under your mattress. Any cash not earning interest is eroding away to nothing with the endless march of time and it’s right hand man – inflation. Keep your emergency fund in a high interest savings account, such as Ally. Sure, you can also keep some cash under your mattress too, just in case. Regardless of where you put it, your money needs to be liquid – readily accessible cash you can get on short notice.

But I can’t possibly save $1000s?!

That’s ok. Start small. Try a $500 or $1000 goal at first. But, you will not be a fully realized, financially independent citizen of Moneyland until you have at least 3-6 months of living expenses saved. You will feel better when you do. Trust this directive.

Your fearless leader,

Citizen One

Don’t agree with your leader? Have some thoughts about emergency funds? Comment below.