Should You Use Your Emergency Fund For Medical Procedures?
July 05, 2017After sharing our decision to pursue in vitro fertilization and how we’ll pay for it on the blog last week, I was a bit overwhelmed with the outpouring of support from friends, family, colleagues and even complete strangers. THANK YOU for your words of support and prayers, they mean so much to us!
I’ve also been asked by a few people why we aren’t using our emergency fund or Health Savings Accounts (HSAs), and those are great questions! Here’s my answer:
Using your HSA
Anyone who has discussed the benefits of the HSA with me knows that I actually emphasize the S in HSA for savings — rather than use the funds I’m accumulating in my account for everyday medical expenses like co-pays and minor bills, I’ve been paying for those things with my out of pocket spending money. The thought is that we’ll let our HSA money build up for when we have a big medical expense that we wouldn’t be able to pay out of pocket, while realizing the tax savings along the way.
Well, that day just came sooner than we had planned, so we WILL be draining our HSAs, it’s just a bit of a drop in the bucket compared to the total cost of IVF. Between my HSA and my husband’s, we can’t even cover the cost of the medication required, but we will cover what we can with this tax-free money.
Why not use the emergency fund?
As urgent and important and life-changing as this is for us, we do not feel that undergoing fertility treatment is an emergency in the way that the financial emergency fund is intended. We are stretching ourselves financially to do this, but we still need a back-up in case one of us loses our ability to earn income, which is really what the emergency fund is for —
- To keep a roof over your head,
- Food on the table,
- Transportation to work and
- Other basic needs met during times of unexpected income disruptions.
It’s why my colleague Erik wrote about the emergency fund taking priority over paying down debt — it’s your first line of defense against “life happening,” even if it’s not earning a ton of interest and you’re paying interest on other debts in order to keep it in place.
At the end of the day, we are choosing to undergo IVF. It’s true that without it we may not ever have biological children, which would change our life plans and be tremendously sad, but that’s not an emergency. It sucks, don’t get me wrong, but no one will be homeless or go hungry if we DON’T do this. We feel a tremendous sense of gratitude and fortune to even be in a position to make this choice – many people are not, which also makes me sad.
Sometimes it can feel like you don’t have a choice, like if you have an accident and receive a $10,000 hospital bill. While it’s important to make a plan to pay your medical debts to avoid them going to collections, depending on your personal situation, using up your emergency fund may not be the best place to turn — what happens if you’re unable to work and pay your rent? That’s what your emergency fund is for. (caveat: sometimes it DOES make sense, but that’s why it’s called “personal” finance)
Keep that in mind the next time you feel tempted to tap your emergency fund — is it a true emergency that will literally keep you housed, fed, clothed and employable? If not, it’s best to seek another way to pay or to make a different choice.
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