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Do you have $10,000 for an accident or medical emergency?

Medical Expenses are #1 Reason for an Emergency Fund

Healthcare premiums, co-pays and maximum out-of-pocket costs are increasing every year. If you think your insurance provides a safety net, it's got a few holes. There may be necessary medical treatments, medications and expenses that are not covered by insurance. Whether it's a car accident, heart attack, cancer diagnosis or a chronic illness, how will you pay for your care?

You need an emergency fund.

  • According to a CNBC article, Americans spent an average of $10,345 per year on medical care in 2016. It's estimated that this annual expense will increase by 45% to $14,994 by 2023.1
  • The Atlantic reported that one of the factors pushing healthcare costs up is the increase in the price of treatment and medication. As an example, the price of one month of oral cancer medication had increased by more than 450%--from $1,869 in 2000 to $11,323 in 2014.2

Although credit cards, borrowing from friends and family or taking out loans may cover some or all expenses, those options can put you into debt and add further strain to your finances.

And while some people have turned to crowd funding as a possible source for paying unexpected and financially debilitating medical expenses, a 2015 Nerdwallet study found that only about 11% of healthcare fundraisers met their financial targets.3

Create an emergency fund

The smart solution is to create emergency savings to cover expected and unexpected medical expenses.

You can set up a separate emergency-medical savings account or add to an existing emergency savings account. Set up automatic deposits, even if it's only a few dollars a week to get started.

To help your money grow faster, consider a savings account at an online only bank. They offer higher interest rates than traditional brick and mortar banks, and you can also find one with daily compounding interest letting your money earn interest every day. Also note that larger balances earn interest more quickly, so adding to an existing emergency savings account may grow your savings faster.

Remember, even healthy people have accidents or get sick. Make a promise to yourself to start your medical emergency fund today.

Check out the competitive rates and benefits of a Premier High Yield Savings or Money Market account at CIT Bank.

From a job loss to medical expenses, learn more about emergency savings and how you can be better prepared financially for the unexpected.

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