How to Build a Health-First Financial Plan

When it comes to financial planning, health and finances are deeply connected—especially for women. We often plan for future vacations, home projects, or retirement, but prioritizing a health-focused financial plan can also make those other goals more achievable. Whether managing future medical expenses, choosing the right insurance, or making smart, health-focused investments, building a health-first financial plan gives you control over your well-being and your wallet.

????1. Start a Health Savings Fund

Saving for healthcare is one of the smartest moves you can make, and it doesn’t have to be overwhelming. Start with a dedicated “health savings fund”—a separate savings account where you regularly set aside money for medical expenses.

Medical expenses can pop up unexpectedly for women, and without a dedicated fund, they can disrupt other financial goals. By setting up a health fund, you’re not only preparing for the unexpected but also giving yourself financial freedom when these expenses arise. To get started, save an amount that would cover at least one major expense, like a dental procedure or a new pair of prescription glasses. Over time, try building up to an amount that would cover a high insurance deductible.

The first investment I ever made was in 3M 公司 . I was always taught to invest in things we use every day, and for me, that was bandages, lol." - Shereese Maynard, MS, MBA She/Her

2. Understand Your Insurance

Insurance is crucial, but it can be confusing to navigate. To make the best choice for yourself, spend some time comparing plans with these factors in mind:

• Monthly Premiums vs. Deductibles: Generally, plans with lower monthly premiums have higher deductibles. A high-deductible plan might work best if you’re healthy and don’t foresee major medical expenses. However, if you have ongoing health needs, paying a higher premium for a lower deductible might be worth it.
• Out-of-Pocket Maximums: This is the most you’d pay annually. Once you hit this limit, your insurance covers the rest. Knowing this number helps you budget for the worst-case scenario and can save you from unexpected medical debt.
• Network Limitations: Some insurance plans only cover certain doctors, hospitals, or pharmacies. Check if your preferred providers are in-network, as out-of-network care can be significantly more expensive.

Understanding these details can be a lifesaver, literally and financially. Look at your past medical expenses and health needs to pick a plan that truly suits your situation.

3. Use Tax-Advantaged Accounts: HSAs and FSAs

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) can help you save on taxes while setting aside money for medical expenses. But they work differently, so here’s a quick rundown:

• HSAs: These accounts are only available to those with high-deductible health plans (HDHPs). Contributions to an HSA are tax-deductible, and any unused funds roll over each year, allowing you to save for the long term. Think of it as a health-focused retirement fund.
• FSAs: Anyone can open an FSA if their employer offers it, regardless of insurance plan type. Contributions are also tax-free, but FSAs generally don’t roll over yearly, so it’s best to estimate your annual healthcare spending carefully.

Both accounts offer tax advantages that can significantly lower your annual tax bill, making it easier to afford care without tapping into savings.?

4. Invest in Health-Focused Products and Services

Staying healthy is often less expensive than treating health issues down the line, so consider health-focused investments that can save you money in the long run. Here are some ideas:

• Preventive Care: Scheduling regular check-ups, dental cleanings, and screenings can help catch health issues early. Many insurance plans cover preventive care at no extra cost.
• Quality Health Products: Spending a little more on things like ergonomic office furniture, supportive shoes, or even cooking equipment can have a lasting positive impact on your health. These purchases aren’t just expenses; they’re investments in your well-being.
• Fitness and Wellness Services: Regular physical activity and stress management play significant roles in long-term health. Consider budgeting for a gym membership, fitness classes, or even a meditation app if it helps you stay active and centered.

Women’s total savings in household retirement accounts are less than half of men’s as of late 2022 - @transamericaninstitute

5. Plan for Long-Term Care

Women generally live longer than men, meaning we’re more likely to need long-term care at some point. This can be a significant expense, so planning for it early is essential.

• Long-Term Care Insurance: This type of insurance can help cover the costs of nursing homes, assisted living, or in-home care. Policies vary widely, so shop for one that fits your budget and potential needs.
• Retirement Accounts for Health Needs: Many people forget they can use retirement savings for health-related expenses. By contributing to your retirement accounts, you’re not only preparing for future living costs but also ensuring funds are available for healthcare when you’re older.

6. Protect Yourself from Medical Debt

Even the best health plans don’t cover everything, and medical debt is a reality for many. Here’s how to stay prepared:

• Review Medical Bills Carefully: Errors are common in medical billing, so don’t fear asking questions about charges you don’t understand. Correcting mistakes can save you from paying more than you owe.
• Negotiate Bills: If you don’t have insurance or face high out-of-pocket costs, try negotiating with providers. Many hospitals and clinics have financial assistance programs or can set up payment plans to ease the burden.
• Consider Supplemental Insurance: In some cases, adding accident, disability, or critical illness insurance can provide extra coverage if you have a serious health event. These policies can offer a financial cushion, covering expenses that primary insurance might miss.

Women’s finances decrease 41% on average after divorce. - Ellevest

Taking Control of Your Health and Wealth

Creating a health-first financial plan is about making thoughtful, informed choices that prioritize your well-being now and in the future. It’s about putting yourself in the driver’s seat regarding your health and finances, so you’re prepared for whatever comes your way. By planning for medical expenses, understanding your insurance, investing in preventive care, and protecting yourself from debt, you’re building a solid foundation for a healthier and wealthier future.

By the way, it's open enrollment season across the country. Here are some resources you might find helpful.

1. ClearPath - Your Roadmap for Life?Podcast
2. Saver's Credit for Retirement Savers
3. Navigate your divorce finances with confidence