Each year, healthcare prices drastically increase, with an average four-person family household requiring over $23,000 in hospital and medication bills for a year. Some costs are out of a family’s control, catching household members off-guard and may quickly wipe out savings, causing severe financial burdens. That’s why preparing for the worst is one of the best things you can do.
For instance, if one of your children gets into a sports accident and needs immediate jaw surgery, you can rest assured that your child will get the best care possible because you prepared early.
Here are different ways you can prepare to shoulder your family’s healthcare needs seamlessly:
Buy Insurance
Insurance is crucial in any family’s healthcare plans, and it’s the one area where many families spend much of their budgets on medical expenses. Although the insurance policies that each household needs vary drastically from one another, every family needs to have family coverage. This insurance policy includes dental, health, life, and accidental death or dismemberment insurance.
Save for College
Saving for college is another strategy that allows you to set aside some funds for your kids and their needs in school, including paying for medical expenses. Doing this helps your child graduate from college or university without massive financial burdens or sudden expensive medical costs. A great way you can save for college is by getting a 529 education savings plan, offering potential tax-free growth.
Take Advantage of FSA
Employers may offer you a flexible savings account (FSA), and when yours does, grab the opportunity. You’ll get a set amount deducted from your paycheck each payroll period, setting aside some funds that you can use to pay for medical expenses your family may need throughout the year, including prescription medications, doctor visits, and deductibles. However, funds stored in FSAs need to be consumed by the end of the calendar year, or it’ll all get forfeited by employers. So, make sure only to save the amount you think your family may need.
Get Life Insurance for Parents
You can buy life insurance for your parents to cover the final expenses that they may leave behind. Doing this early on can provide peace of mind for you and your family when they pass away. In essence, it protects your family and leaves you all a non-taxable amount at the time of death, covering several expenses such as medical emergencies. Adult children need to consider their elderly parents’ financial health and buy policies for each parent. However, you’ll need their consent and proof of insurable interests.
Invest in Trust Funds
Trust funds are legal entities holding properties or assets on behalf of another individual, group, or organization. It’s an estate planning tool that can keep your assets in a trust managed by neutral third parties or a trustee. These may include cash, property, stocks, a business. Trust funds may also minimize estate taxes, allowing you to get more money to more generations further down your family tree, protecting treasured assets from your beneficiaries, giving you reserved funds during emergencies.
Rainy Day Savings to Protect Budget
Having emergency funds is pivotal in keeping your family’s budget on target. That’s why it makes sense to set aside enough funds in an emergency fund to cover the expensive costs of unexpected trips to the emergency room in addition to three months of income. The best and cost-effective way you can do this is by opening a health savings account, allowing you to put cash aside for elective surgeries or emergencies. The best part is, these accounts stay with you even when you change jobs.
The best way to prepare for your family’s healthcare needs is by practicing proper money management, allowing you to save more money for the expensive hospital and medication bills, ensuring a healthy and prosperous life for you and your family. The methods mentioned can help you get a great kickstart.
