Oct 30, 2008

Your best financial investment may be your good health (but you should also practice sound money management)

I came across an article titled Medical Debt Sending Many Over Financial Brink. The gist of the article is that most people manage to get along financially until there's a crisis of some kind, which causes them to fall behind in payments, eventually leading to catastrophes like foreclosure and bankruptcy. The article claims that half the time, the precipitating crisis is a medical one.

This quote was how the article ended:
"I don't know if we have enough working years left to buy a house," Donna said. "That's pretty heavy punishment for having gotten sick."
My instinctive reaction was to think, "Well, could you have done anything to prevent your illness?"

And that made me think: Investing in good health could really be worth thousands of dollars in the long run.

Of course, there are many other reasons to want to be in good health, but if money is what motivates you, then by all means, use it to get in shape, lower your cholesterol and blood pressure, eat less meat and saturated fats, eat lots of fruit and veggies for the antioxidants and flavonoids, etc. No one can guarantee that you won't end up with huge medical bills at some point, but at least you've reduced your risk (and increased your quality of life).

As it turns out, Donna had uterine cancer, which I honestly don't know much about. But her husband had "serious artery disease," which sounds to me like the average heart/cardiovascular problem that's common in older men. The really disturbing part of their story is that they were "technically fully insured" throughout their medical crises. But, reading between the lines, I gather they didn't have much savings and that's why they couldn't pay the annual out of pocket maximum under their insurance plan. The max was $9,000 - obviously a lot of money, but not exactly an astronomical amount.

I'm not judging Donna and her husband - for one thing, I just don't know enough about them to form any kind of opinion. But I can speculate and point out that a lifetime of sound money management would probably have left them in a position to pay that $9,000. The article doesn't say how old they are, but since they have grown children, I am going to guess they are at least in their late 40's, and probably more like in their mid-50's. If they had: (1) carried their mortgage as their only debt; (2) saved for retirement; and (3) built up an emergency fund, they would not be in the situation they're currently in.

Of course, doing these three things is not easy. But I know it can be done, even on a very low income. Thanks to the internet and especially blogs, I read such success stories every day. It's just a matter of prioritizing and acting according to those priorities. And if you don't prioritize and act accordingly, then at some point, you have to pay the price.

Image credit: Indiamarks.com.


Allie Z said...

I read your posts daily, but I have yet to post a comment. :) This tugs at my heart. I can't help but wonder if this article was published due to the upcoming vote? I have yet to hear that Yahoo swings blue over red. It is a tough boat to be in, falling victim to financial demise. I wonder, is this article in anticipation of Obama's lovely (j/k) health care plan???

It's true though, every day there are success stories published. Making a solid plan- and sticking to it!- will make all the difference in the world. I started reading your blog 3 weeks ago, after I realized we were spending $1200 per month on food/entertainment/drugstore purchases. Gah! While we've been able to scale back to $125/wk, I'm sure if we stick to our plan, we'll get down to $65+/- per week.

Just last week my mom-in-law was in the hospital. She was discharged after 6 days of stay for blood clots in the lung & leg. Her out of pocket? $500 co pay plus 10% of the total bill. She had never read her insurance booklet, she knew she was "fully covered", but she never took the time to investigate her true costs...

Sticking to a plan, being mindful of your premiums, etc. I think that most folks don't take the time to make sure their ducks are in a line. I think most folks barely skim the surface. Our society today allows for short cuts to be taken, enabling blame to be put where it does not belong.

Anonymous said...

I did not read the article, only your quotation of it but it's hard to imagine that they could not lay their hands on $9,000. That's a sad state of affairs. Hmm...pehaps I'd better go read the article as there has to be more to it than that!

Anonymous said...

I realize this is an older post...
Agree with all that you said, about not having an emergency fund, carrying too much date, not knowing the details of their medical plan...
The other thing, everyone who can contribute to a flexible spending account should do so...
And just a little defense of the guy with artery disease--many cholesterol issues are not controlled by diet, they are hereditary. Cholesterol is manufactured by the liver so even a vegan diet and 10 hours of exercise per week may not change a person's arterial health if they are genetically predisposed high cholesterol. But, it takes years before it causes problems---plenty of time to save for that rainy day!

Anonymous said...

*debt* not date!