How to Budget for a Health Insurance Deductible
Identify the amount of your deductible., Review your fixed expenses., Trim discretionary spending., Supplement your income, if necessary., Sign up for direct deposit.
Step-by-Step Guide
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Step 1: Identify the amount of your deductible.
Take out your health insurance policy and read it.
Deductibles should be one of the first pieces of information listed.
If you can’t find the deductible information, contact your health insurer.
Now divide your deductible by
12.
This is the amount of money you will need to save each month.
If you don’t use the money you’ve set aside, you can roll it over to the next year. -
Step 2: Review your fixed expenses.
Fixed expenses are expenses that don’t change each month.
They are also usually for necessities, such as the following:rent or mortgage utilities debt payments insurance premiums car payments , Discretionary spending is what you can live without each month.
You’ll want to lower your discretionary spending as much as possible so that you can free up money to contribute to your deductible.
Some discretionary spending is “fixed,” i.e., it costs the same each month.
However, the real test is whether you need it.
For example, your Netflix bill is fixed, but you can happily do without it.
You can also cut back on vacation trips, meals out, clothes shopping, and entertainment., Sometimes you can’t cut enough.
For example, most of your monthly income might already go toward necessities like rent and health insurance premiums.
In that situation, your only choice is to increase your income.
Ask for a raise.
Explain to your boss why you warrant a bump up in pay.
Work overtime, if possible.
Overtime hours are paid at
1.5 times your normal rate of pay, so that money adds up quickly.
Seek a part-time job.
You might work as an Uber driver, start a freelance photography career, or put your time in as a barista at a coffee shop.Contribute your extra earnings toward your health insurance costs. , To help you save, use direct deposit.You should also create a separate savings account specifically for health care spending.
If you mix your health care savings with you regular savings, you might be tempted to dip into the money for luxuries.
By keeping separate accounts, you make it harder to spend the money. -
Step 3: Trim discretionary spending.
-
Step 4: Supplement your income
-
Step 5: if necessary.
-
Step 6: Sign up for direct deposit.
Detailed Guide
Take out your health insurance policy and read it.
Deductibles should be one of the first pieces of information listed.
If you can’t find the deductible information, contact your health insurer.
Now divide your deductible by
12.
This is the amount of money you will need to save each month.
If you don’t use the money you’ve set aside, you can roll it over to the next year.
Fixed expenses are expenses that don’t change each month.
They are also usually for necessities, such as the following:rent or mortgage utilities debt payments insurance premiums car payments , Discretionary spending is what you can live without each month.
You’ll want to lower your discretionary spending as much as possible so that you can free up money to contribute to your deductible.
Some discretionary spending is “fixed,” i.e., it costs the same each month.
However, the real test is whether you need it.
For example, your Netflix bill is fixed, but you can happily do without it.
You can also cut back on vacation trips, meals out, clothes shopping, and entertainment., Sometimes you can’t cut enough.
For example, most of your monthly income might already go toward necessities like rent and health insurance premiums.
In that situation, your only choice is to increase your income.
Ask for a raise.
Explain to your boss why you warrant a bump up in pay.
Work overtime, if possible.
Overtime hours are paid at
1.5 times your normal rate of pay, so that money adds up quickly.
Seek a part-time job.
You might work as an Uber driver, start a freelance photography career, or put your time in as a barista at a coffee shop.Contribute your extra earnings toward your health insurance costs. , To help you save, use direct deposit.You should also create a separate savings account specifically for health care spending.
If you mix your health care savings with you regular savings, you might be tempted to dip into the money for luxuries.
By keeping separate accounts, you make it harder to spend the money.
About the Author
Stephanie Lee
Committed to making DIY projects accessible and understandable for everyone.
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