How to Organize Medical Expenses

Video Transcript

"With the help of Expert Village, I hopefully will be able to help people and assist people in terms of developing a budget. Hi, in this clip we are going to talk about the form that impacts the budget which are medical, dental and vision expenses. This budget item can have a heavy impact on your budget depending on your situation. Again, it could be a medical situation that could come up and this could really put a stress on the budget. Just to give you an example, in my personal situation I have a daughter that is a Type 1 diabetic, so our medical expenses are very, very high. She may be in a situation where her insulin is low. We may have a large medical expense on our hands. So this will be different for each particular individual, but it is something you need to be aware of that can really impact the budget. Typically, on medical if you have a plan that is covered at work, you may pay premiums, but you may have out-of-pocket in terms of copays, or you may have to pay for an office visit. For example, an office visit may be $50 per visit which is customary, so that is something you want to put in your budget. If you are going to the doctor a couple of times a year, you need to put in your budget that there may be a couple of hundred dollars in office visits. Therefore, you need to put that in your budget. Another expense that can have a big impact on the budget are dental expenses. Again, I have young kids and I know at some point in time they are going to need braces and that is something you need to plan for in your budget. If you know there may be a big dental expense coming down the road, put it in the budget. $50 or $100 a month for dental expenses as well. Then vision. This is something that on a routine basis unfortunately your eyesight doesn't get better over time; it gets worse. So therefore, vision expenses can also impact your budget, so you might want to put on a monthly basis a little bit of your budget for glasses or contact lenses or just a routine eye examination, so that may be another $20 or $30 per month that you need to include in your budget. The key thing is that even though you might not have an expense this month, you might have an expense sometime in the year. Therefore, you need to compensate it and have it in the budget. The budget is designed to cover things that you are going to have to pay out in terms of an expense."