What Financial Health Means to Me

According to CFSI’s Consumer Financial Health Study, 57% of Americans—approximately 138 million adults—are struggling financially. While we can probably picture what strugging looks like, what about being financially healthy? To me, financial health means that I’m prepared to handle what life throws at me. In my case that means that when my wife and I began suffering with chronic illness, we were able to cover our medical bills and avoid bankruptcy.

What Financial Health Means to Me

First my wife, who was already suffering with fibromyalgia, learned she also had rheumatoid arthritis. She worked as long as she could with the pain, but in the end had to file for disability. Then I had a heart attack, learning I had type 2 diabetes and congestive heart failure in the process. That required multiple hospital stays and surgery, but thankfully I am stable now. Still, I had to retire a few years earlier than planned. At the same time our income was taking a significant hit, our healthcare expenses were increasing.

I think most of us are aware of how expensive healthcare is in the United States. Yet still it might surprise you to learn that almost 30% of my household budget is spent on healthcare insurance premiums, doctor visits, prescription medications, tests, and other medical necessities. The average household spends only 6% of their budget on these healthcare costs. Being financially healthy and sticking to our budget means that even with this increased burden, we’re still able to pay our expenses, maintain an emergency fund, reduce our debt, save money, and keep our credit rating strong.

Financial health really matters. So how did we make it to a reasonable level of financial health? It took a lot of good decisions on a day-to-day basis. Things like deciding not to buy that item we wanted at the store, or cooking at home instead of going out to eat. It also meant doing some planning to set a budget, establish an emergency fund, and obtain needed insurance coverage. Long term disability coverage was an important one for us, and yet it’s one that many people overlook. Getting to financial health meant eliminating our credit card debts and reducing our other debts.

That’s not to say that the journey has ended. Our medical expenses are still adding up year after year, and we must remain vigilant to be able to stay afloat financially. Plus you never know when another unplanned expense may come knocking at your door. In the meantime, we set financial goals and revise our budget regularly.  We try to find new ways to increase our income (not so easy in our situation) and decrease our expenses.

We all tend to think that bad things won’t happen to us…until they do. Improving your financial health means that when that day comes, you’ll be prepared and your finances will be secure.

Are you prepared in case of an unplanned hit to your finances? What if that situation lasts longer than a few weeks? #FinHealthMatters

14 Comments

  1. I’m sorry to hear about your chronic illness. I can’t imagine what that’s like and to have all those expenses must be tough. On the plus side, you guys have responded with your financial health. I don’t think I’d be prepared for that kind of expense when I can barely pay for prescriptions now… (I live in the UK)

  2. Six percent?! Really? Wow, I’m so jealous of the average American. Since I work, I don’t think 30% of our budget goes to health costs. But at least 20%.

    We have a lean EF — that is, it’s less than 3 months’ of expenses. But we’re slowly building it up, and we’ll get savings back up to a healthy point after it’s killed by the last of the dental implant bills. So we’ll be more financially healthy than ever!

  3. People get frantic over the student loan “crisis” despite the fact that the students did it to themselves. Yet the very real healthcare crisis gets a side mention at most.

    I priced health insurance for my family to be self employed a few years back. If I had chosen one of the Obamacare packages, I’d have paid ~20% of my gross income for health care to cover the birth of my son this year, and that’s with a very nice salary. Very glad I stayed with my employer for the moment instead of striking out on my own.

    If I were retired, it would easily be more than 30% of my current income, although I’d hope and pray that Medicare would kick in to reduce the overall out of pocket.

    No good, any way you look at it.

    1. Healthcare costs in general are just ridiculously high even based on the current system and changes that have been made over the past few years. It sounds like there’s going to be even more changes after the next election, no matter who wins. Hopefully that will correct some of the problems we’re now facing. Thanks for your comments, Jack.

  4. Having both fibromyalgia and rheumatoid arthritis is a double whammy in the pain department. And I’m sure you have to be vigilant with your heart issues – not just with your finances but with getting the right treatment. I’m glad you’re able to manage both.

    It remains to be seen how expenses will pan out for us during our years before Medicare. Not having children, it would be easier for us to pick up and move to another country if we felt the need. We’re trying to mitigate health issues by eating well and exercising, but no one has a crystal ball.

    1. Mrs. Groovy, I’m reminded of the famous baseball player Mickey Mantle who once said, “If I had known I was going to live this long, I would have taken better care of myself.” Your plans to try to remain healthy are a wonderful start. The years before Medicare can throw you a curveball if you have some unexpected medical problems, so I hope that you’re covering your bases with good insurance, even if the cost of it is higher than you’d like it to be. Thanks for your comments.

  5. Meidcal expenses are high for most people–we just don’t see them because they are hidden. The average family health insurance plan is over $14,000 a year if the family is paying all the premiums; its just that so many middle and upper income people are used to having those premiums paid by their employer.

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