It happened to me.
About six weeks ago, my business partner and I were driving back from a wonderful day of speaking to leaders in East-Central Wisconsin. When we were about two hours out from Minneapolis, I looked at my phone and saw that I had five missed calls from my husband. Now my husband is the type of guy who rarely calls twice in a row – why would he call five times? I called him back and was greeted by the voice of a paramedic who assured that my husband was breathing and conscious but he had been injured in a serious car accident. I immediately fell apart. As someone who travels often my worst fears had been realized. He was hurt and I wasn’t there to be beside him when he needed me. My business partner and I continued the longest two hour drive of our lives inching ever closer to my husband’s side.
Now six weeks later, my husband is progressing in the healing process. It will take him about a year to fully heal from his injuries but we’re just grateful that a full recovery is expected. You may wonder why I’d share a story like this. I assure you, I’m not telling this story to scare you. Although it certainly is a scary situation. I’m sharing it as a reminder of why we put protections in place so that in the most frightening moments we can spend time focusing on the people we love rather than worrying about our finances.
Here are a few things that gave me comfort during the two days I spent in the hospital with my husband:
· Emergency Fund: My husband and I have two different emergency funds: a short-term fund with about $1000 in it to be used for smaller emergencies like a broken appliance and a longer-term fund that we are slowly building to help us take care of larger emergencies like one of us losing our job. The extra expenses started pouring in pretty quickly, it was nice to know that we had a cushion to keep us afloat if we need it. I kept reminding myself – this is why you save!
Tip: Wondering how much you should save for an emergency? Use this handy calculator from money under 30.
· Living Below Our Means: My husband and I have always lived below our means, but over the last few months we have lived significantly below our means. We’ve put a lot more money in savings and created a significant buffer in our checking account. It was comforting to know that we already knew how to live on less. If we had to live on one income – it would stretch us – but we could do it. If either of us had to take unpaid time off, while not ideal, we could afford it.
Tip: Got a raise or bonus? Don’t add that to your living expenses. Put it toward savings or debt repayment. Don’t let your lifestyle creep. Not sure you can do that? Split the difference. Add a little cushion to your budget while putting a significant percentage toward long-term goals.
· Health Insurance: Most of us have had a period in our life where we weren’t covered by insurance. I’ll be the first to admit that I have usually taken my health insurance for granted. The largest medical expense I’ve had was getting my wisdom teeth taken out and most years I don’t have any expenses at all. I’m now incredibly grateful for the benefit that my husband and I receive through my employer. As I tried to total up how much this accident might cost us, a friend reminded me to look at the out-of-pocket maximum on our health plan. I was so relieved to know there was a limit on how much we would be charged.
Tip: Don’t have health insurance? Take a look at the options available through your or your spouse’s employer. Still can’t get access? See if you can get coverage through the Exchange. Have health insurance? What’s your out-of-pocket maximum and how would you pay for that out of pocket?
· HSA: I’ve been a big fan of high deductible health plans for a while because my husband and I have had minimal health expenses. I like that my and my employer’s HSA contributions are ready and waiting for me when I need it. The funds don’t expire from year-to-year and they move with me from job to job. Plus, it’s another tool to help me save for future health care costs. I was comforted to know that the funds in our HSA would more than cover our out-of-pocket maximum for our health insurance.
Tip: Have a high deductible health plan? Make good use of your HSA to save up funds for today and tomorrow’s health expenses. Need help framing up your strategy? Check out this Fidelity article.
· Car Insurance: If you’re anything like me you don’t think much about your car insurance on a daily basis. If you consider any part of it, it’s likely how much the deductible is if you get into a fender bender. But have you ever looked into the other elements of your car insurance? For instance, how much personal injury protection might you receive if you’re in an accident? Will you get reimbursed for wage loss? How much bodily injury liability coverage do you have if you injure someone else?.
Tip: Begin by reviewing your current policy, what coverage do you currently have? Wondering how much coverage you might need? Take a look at these Wall Street Journal and Bankrate articles.
· Disability Coverage: What coverage would you have if you were injured in an accident or needed to have an intensive surgery? Often times, we only think about long-term disability but short-term disability is a lot more common. In fact, more than one in four 20-year-olds will experience a disability for 90 days or more before they reach 67. How will you pay your bills and get the health care coverage you need if you become disabled?
Tip: Review what your employer offers – does it include both long-term and short-term disability coverage. Not sure if you have what you need? Check out this NerdWallet article for more information about why you need disability coverage and how to get it.
With the accident in the rearview mirror, I cannot tell you how grateful I am for all of these financial protections. They have made my husband’s healing process as smooth as it can be. But, I have to admit I’ve been most grateful for the tangible and intangible support of our community – the cards, texts, phone calls, gift cards, meals, and special gifts that people sent our way. At the end of the day, if you do nothing else with this article, I encourage you to really invest in your community. I know it sounds trite, but it’s important, to reach out to the people you care about and tell them you love them. If they are in a difficult place, ask them how they are doing and let them answer in their own way and in their own time. Offer something specific that you could help with – whether it’s a quick check-in phone call, bringing over groceries, or mowing the lawn. Even if they say “no,” I’m sure your offer will be appreciated.
Sometimes connecting your money and your values means putting protections in place so you can better absorb a shock to your financial system. Those protections, while they come at a cost, will give you the peace of mind that allows you to put your values first, even during tough times. Believe me, the last thing that you want to be worried about when you are sitting next to your loved one’s hospital bed is how you’ll pay your bills.
Photo by Tandem Tree Photography from my husband and I's engagement photo shoot.