Don’t Be a Statistic: More Than Half of Us Aren’t Paying a Hospital Bill of $500 or Less

Emergency fund
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Many American struggle to pay hospital bills.

Nope, this isn’t new. We’ve read about the number of Americans who can’t afford a surprise medical bill of $100 or more. (Hint: It’s 37% of us.)

And we’ve read about what happens when you don’t pay your medical bills, which includes about 43 million Americans with medical debt.

A new study from TransUnion Healthcare found similar conclusions. In 2016, 63% of hospital bills were $500 or less. Of that percentage, 68% of those bills were not paid in full.

This means that, depending on how the hospital treats patient debt, these bills could have gone to collections, which then hurts your credit score.

Here’s How to Prevent Surprise, Unpaid Hospital Bills

Establishing an emergency fund, also called a “rainy day fund,” is crucial in financially surviving this so-called crazy life.

Sure, starting one might prove difficult. The idea is that you squirrel away money — and don’t touch it, unless there’s an emergency.

Determining what qualifies as an “emergency” can get tricky, too.

Penny Hoarder Kelly Smith ran into that problem, but here are three questions you can ask yourself. More often than not, hospital bills will fall into the “must dip into the emergency fund” category.

But, let’s back up. You don’t have an emergency fund

First, determine how much you need to save. Many experts say six months’ worth of living expenses, which would easily cover that $500 hospital bill.

So where is this money going to come from?

It won’t magically appear, unfortunately. You’re going to need to create a budget. Find out where your money is, where it’s going and where you can scrape up the extra pennies. Some apps will even do this for you (keep reading).

Next, find a place to stash that money so you aren’t tempted to dig into it for any frivolous expenses. This is arguably the most important step.

3 Accounts Perfect for Your Fledgling Emergency Fund

If you’re like me, keeping extra money in your regular checking account isn’t going to work.

It’ll somehow disappear.

Here are a few ideas on where to house your emergency fund.

1. Open a Separate Checking Account (One That Gathers Interest)

A few months ago, I opened an Aspiration Summit Checking Account.

The big draw for me was the 1% interest, which was 100 percent more than I was earning with my previous checking account.

It’s also online-only, so I’m less likely to go to an ATM and funnel money out. (I mean, I can because it reimburses you for ATM fees, but I’m less apt to do this.)

I set the account up so a portion of my paycheck automatically gets deposited. This makes saving absolutely effortless. Plus, it’s a nice surprise when I check in and see I’m building an emergency fund and earning interest.

Read more about it here, and then join the waitlist. (It only took a few days to secure my card!)

2. Start Microinvesting

Another way to automatically tuck money away — and make it work for you — is to open a microinvesting account.

That might sound intimidating, but these come in the form of easy-to-use apps. You’ve actually probably heard of a few, like Stash or Acorns.

Stash allows you to start investing with just $5. Then, set up your account to suck out a certain amount per week. Even $5 will build up. Then, Stash automatically invests that money so you don’t need to worry about it. If you want the full overview, we’ve got it here.

Acorns is similar in that it’s a separate account you can set up to automatically make withdraws. Acorns will round up all your purchases and collect the change, which it then invests. It’ll add up faster than you might think!

Both of these options are easy. Plus, it’s kind of fun to watch your money grow.

3. Start Saving — On a Micro Level

If you’re not so keen on investing your emergency fund, there are plenty of apps that allow you to simply save.

One of my favorites is Qapital, which makes saving sorta, kinda fun. I managed to save almost $700 in five months.

You’ll set a goal — or two or three — then set your rules. For example, if I walk a certain amount of steps per day, it’ll trigger a $5 deposit into my Qapital savings. I also set it to round up my purchases and make a weekly deposit.

How much or how little you save is up to you. Honestly, the gamified savings app is a bit addicting.

So no more excuses, it’s time to start saving so if an emergency happens, you’re less likely to have to go into debt to cover it.

Carson Kohler (@CarsonKohler) is a junior writer at The Penny Hoarder. She’s finally established an emergency fund, and it feels oh-so good. Let’s just knock on wood she doesn’t have any clumsy incidents anytime soon.

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