My wife and I are in our early/mid twenties. We have saved a little more than a third of our income over the past two years so we had several thousand dollars in an emergency fund plus extra savings. The amount isn’t really relevant – the point is that we had no plans to use it.
At the end of 2016 we were both in great health, and being young we decided to go with my employer’s HDH plan with an HSA. Last weekend we blew through the deductible on my wife and we will likely hit the out of pocket maximum before the month is over. This health issue came out of nowhere and we’re very fortunate to have good insurance.
But because we have extra savings, we don’t have to make medical decisions based on cost. We can pay the full annual out of pocket maximum and we won’t really miss it. If a doctor thinks a test is necessary we can simply authorize it without worrying about how we will pay for it. It has been stressful but I can’t imagine how much more stressful it would be if we had to go into medical debt to pay for it all.
We could have eaten out more last year. My wife could drive a nicer car. We could live in a bigger apartment or house. But I wouldn’t trade the freedom of having the extra savings for any of that.
This came out of nowhere and was frankly highly unlikely. It could happen to anyone. And we were easily able to pay for it. An emergency fund is psychologically, emotionally, physically, and financially is the most important improvement to your quality of life that you can “buy.” in my opinion anyway.