Medical fund: fund right away, what's the use

Hi everyone,

Here in Holland, Europe, because of my insurance, for my medical bills I only pay the first €900 yearly. In my experience, I only use this like once every five years. Anyway, I'm currently setting up my budget so that in about a year, I have €900 handy in this category.

I do have a savings account that I have not included in YNAB for all kinds of reasons. I was thinking about transferring (not in my budget, but a real bank transfer) €900 to my checking account that is included in YNAB. That gives me more breathing space so I can use my 'checking' money for other stuff.

Now as I was thinking through all this, there's one thing I don't get. If at some point I have to use like €500 for a medical bill, then I would right away, in the next month, have to reserve money in my budget to replenish my €900 fund. So when a medical bill comes up, I will feel the effect right away anyway, so why bother putting away money monthly to fill up this fund?

Someway or another, I feel like I'm fooling myself, but I don't quite get what it is. Any other YNAB'ers who recognize this problem?

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  • jenmas Is the queen of budgeting for her max Out of Pocket Medical expenses and it's an extremely wise habit, so you are smart to do it!  Definitely put that money into your YNAB budget.  Do you know of the all- important https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/ article?

    Just add your 900 euros to your on-budget account and budget any amount to your medical expense category, and it's there for as long as you want it there or spend it.  You can still spend from your checking account as long as it's covered by whichever category you spend from.  Just keep an eye on your running balance if you're worried about overdraft.

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  • If I'm reading this correctly, you spend up to 900 Euro per year for medical costs, and after you spend that 900, you pay 0. If that's correct, you don't need to pay back medical expenses right away - you can spread it out so that when January (or whenever the start of your yearly is) hits you have 900 again. 

    So say you have a 500 medical bill in June. You have 6 months to rebuild the medical bills fund to 900 (83.33/month), as opposed to needing to put 500 back immediately. Yes, your medical bills fund would have less than 900 while you fill it back up, but if you only need that 900 once for 12 months, then you have the time to spread out payments so you're not affected by the bill as immediately.

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  • Hi, I'm Dutch as well and have also chosen the highest voluntary deductible excess.

    I have those euro's safe in a 'eigen risico' category, but then also save around €20 a month for medical expenses (in a different category). This ensures that if I do have medical expenses, I don't necessarily have to use my 'eigen risico' fund. If my medical expense category ever exceeds the amount of my eigen risico, I'll just stop funding that category until it needs to be funded again (effectively freeing up that €20 for other use).

    The reason I budget this way, is it makes me feel like I'm more in control of my monthly budgeting. I want to prevent the scenario you sketched:

    Orchid Boa said:
    If at some point I have to use like €500 for a medical bill, then I would right away, in the next month, have to reserve money in my budget to replenish my €900 fund.

    As long as my medical expenses remain low (and they usually are, or I would lower the voluntary part of the eigen risico), I don't have to budget a large amount each year, but I also don't have to worry about not having the money on hand.

    I hope this helps 😊

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  • Hey, thanks a lot. Yes, this does help. It's funny how I, while moving money & categories while setting up my budget, pretty much came up with the same solution. Which, if everything goes smoothly, means that I'm saving up too much money for my medical expenses.

    I find it funny to see how YNAB'ers, including myself, develop a similar sense of dealing with money & expenses.

    Thanks and bedankt! :)

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