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By Michael Emery, Ambledown Financial Services Marketing Executive
As the year begins, everyone starts out with their best intentions and plans for the year ahead. Common New Year’s resolutions would include eating healthily, exercising more, perhaps quitting bad habits, and also starting the year with a healthy savings mindset.
Come February, when many people have almost forgotten about their News Year’s resolutions, planning for a year of healthier finances becomes possible. Now is the time to start putting the foundations of healthier finances in place.
Get a safety net
Some of the biggest blows to a monthly budget are unexpected and unavoidable expenses – such as car repairs or medical treatments. By paying a little extra each month in the form of insurance, you gain a safety net that will protect you from significant unexpected costs.
An important area to review is your medical scheme cover. Consider: How did you do in the past year? Were you caught off-guard by treatments and/or a hospitalisation that you thought was covered and it wasn’t? Having a plan in place is the best way to save yourself from a heavy financial pinch to cover the shortfall. Gap cover is a good place to start when planning to avoid unexpected costs not covered by your medical scheme. To determine the product that best suits your needs, we suggest you contact your broker.
What to consider when planning your healthcare budget
If you have a medical savings account with your medical scheme provider, it’s important to know what your limits are so that you can plan accordingly. Most medical schemes only allow for an upgrade once a year, but downgrades are typically available at any time. But before you schedule a downgrade to a plan with a lower monthly premium to save costs, make sure that you know what benefits you’ve got and what you’ll be trading in for the downgrade. Compare plans and be sure to check whether you’ll incur any penalties or waiting periods with a downgrade.
Another note to factor into your planning is the provider network. Some medical scheme plans will stipulate which hospital you can use and could impose penalties if an out-of-network provider or hospital is used. It’s important to know what you’re covered for so that you can plan accordingly. Check with your medical aid or your broker for the list of network providers in your plan.
Waiting periods are also important to take note of when planning gap cover. If you are considering gap cover, check the required waiting period to ensure that you are not caught off guard. Don’t wait to take out cover when you know you need a procedure or require extensive treatment, as the gap cover will more than likely have waiting periods that could expend as much as 12 months for a pre-existing condition.
You should also check the exclusions listed in your medical scheme cover and gap cover. It’s important to note that most gap cover benefits will not cover any treatments that are excluded or not covered by your medical scheme.
Remember health is wealth
An excellent way to avoid unnecessary medical expenses is to focus on your own health and wellness. Taking care of your health is one of the best investments you can make for both you and your family.
This means not smoking, not overindulging in food and alcohol, and making an effort to get regular exercise.
It is also important to get enough sleep. There is a strong correlation between the quality and quantity of sleep and how well your immune system functions.
Despite the stresses most of us are experiencing now, it is vital to find ways to de-stress, and manage and regulate your emotions, as this is associated with greater wellbeing and financial success. Try to appreciate the little things, and ‘stop to smell the roses’, to calm yourself, get a clearer perspective and improve your mental health.
So, even if your New Year intentions included savings and wellness, but January proved a bumpy start, it’s never too late to improve your physical, mental and financial health. Take control of your budget and spending by putting better plans in place now.
Ambledown Financial Services is authorised Financial Services Provider No.1028