Ruth's Two Cents: Money Management Amid Health Struggles

Hi Ruth,

I’m facing a tough situation, juggling a recent chronic health diagnosis and personal finances. My medical condition is costly, and I’m already struggling with some of the expenses — let alone what other expenses might be coming my way in the future. It’s eating into my savings and causing financial stress. How can I manage my expenses at this time without sacrificing my financial stability?

It is time to assemble your support team because this is too significant an event to cope with alone. You will captain your team, and you are the primary decision-maker. There is a crucial question that you will be continually asking yourself as the weeks unfold. What is the best course of action for me, given what I know about my health today, and what path should I take to lead me back to health while staying financially healthy?

Now recruit your team members:

• Health professionals who deal with your primary care and help you navigate the health system
• Government organizations that work alongside the health system to ensure you are getting any support you are entitled to
• Your Insurance company
• Family, friends, employer, and coworkers

In my limited experience of helping others cope with a health crisis, I became immediately aware that patients must advocate for themselves and ask for what they need. If you cannot do this, you need your team of family and close friends to step in and advocate on your behalf.

If you ask the right questions and approach the right people, they will help you with your medical finance questions. From a personal finance perspective, this is a financial emergency, and you can treat it as such. Your expenses are unknown; therefore, managing your savings and income is critical now. As much as you might try to ‘carry on as normal’, life is not normal, so adjust to suit.

Conserve your money

All unnecessary spending needs to stop immediately as you begin to spend every dollar carefully, freeing up as much cash as possible to cover immediate costs such as a doctor’s bill. Stabilize your situation and conserve your money so you have more to go around if required.

Contact your insurer

Do you have health, life, trauma, and income protection types of insurance? Contact your insurer and see what they will cover. Read the fine print. Ask questions. Bring in a family member or close friend to get their help and input if you are not in the right state of mind to deal with an insurer.

Accept that your out-of-pocket expenses will continue

Although New Zealand has some free healthcare, some of it is delayed, and paying for treatment yourself speeds up the process.

In the ideal world, you will have a specific bank savings account (Sinking Fund) for your health needs that cover anything related to keeping your body healthy (doctor, dental, optical, etc). The purpose of this savings account is to pay immediate out-of-pocket expenses, such as the repeated doctor visits you are likely to have in the lead-up to a diagnosis.

Next, use your emergency fund

Once that fund is empty, you shouldn’t hesitate to use your emergency money, and this diagnosis is definitely an emergency. You don’t mention an emergency fund specifically, but you do mention ‘savings’. I would consider using these as your emergency fund, spending every dollar carefully.

By using first the Health Sinking Fund and then the Emergency Fund, I hope that you can cover all bills that come your way, from parking at the hospital, putting fuel in your car to attend appointments, and paying for an X-ray or a doctor’s visit.

Begin to access government and community resources

The first stages of a significant medical diagnosis are intense and uncertain, with new information coming at you thick and fast. Take notes, record appointments, bring a support person to help you remember what was said, and ask questions about what you don’t understand. Start to work out what health-related costs are coming up, and then begin to apply for any financial resources that are available to you.

Learn what costs you might incur and approach each agency for their input and support. For example, I live in a regional town, and medical issues may mean I have to live close to a hospital in a bigger city to get access to treatment for a short period. These cities have funded accommodation for people just like me. Find what is available to you.

Figure out how to cope with lost income

If your illness will affect your ability to earn an income, approach the relevant agencies early and ask questions about when they will step in to provide financial support. Speak with your employer about extended leave options and financial support. If you become physically unable to care for yourself or your property, seek agencies that provide government-funded support, such as house cleaning.

Don’t be too proud to accept help

When your good friends say, “How can we help?”, they mean it. Instead of saying, “I’m okay, but thanks for asking”, just be honest about your situation and let them help you. For example, you might say:

• I have a procedure this week that I know will tire me. Could you collect me from the hospital? I can’t face taking the bus.
• I’ve lost the desire to cook. Is there any chance you could freeze me a few easy-to-heat dinners? That would be a huge help.
• I’m having trouble negotiating government websites to access the information I need to offset my financial costs. Could you please help me with this?

You will get back on track with your money

You reference sacrificing your financial stability and eating into your savings, so clearly, you were working towards some goals. But those plans get put on hold in an emergency like this. All saving stops while you cope with this emergency, meaning the money you were moving into a savings account for another purpose is now used for health. You’ll get back to those other goals when you are well. Give yourself a break here. Focus on what’s important.

Although your savings might not have been for this type of spending, it is a credit to you that you have them. Therefore, if you can manage your money exceptionally carefully and at the same time tap into the government, community, workplace, and family financial and personal support that is hopefully available to you, you will get through it okay financially. This situation won’t ruin you financially, but it may set you back a little. Make peace with that.

Thank you for sharing your situation

I have written this piece for both you, who is in the midst of a health situation, and for everyone else who is not. I appreciate you sharing your situation because it is helpful for others to see the degree of helplessness that you can feel if a medical diagnosis, with an unknown financial price tag, is thrust upon you.

We can all learn by putting ourselves in your shoes, thinking about how prepared we would be in a similar situation, and acting immediately if we find ourselves financially lacking. Plus, I know that if I had a friend coping with what you are going through, I would be honored to be asked for help. I wish you a speedy recovery back to full health, and I’m sure that a financial recovery will follow soon after.

Got a burning money question for Ruth? Send them through to [email protected]!

Ruth blogs at thehappysaver.com all about how she and her family handle money. What’s the secret? Spend less than you earn, invest the difference, avoid debt and budget each dollar that flows through your hands. She firmly believes that if you can just get the basics right, life becomes easier from there on in.