NerdWallet's Smart Money Podcast - Money Lessons From Our Moms and How to Budget With an HSA on a High-Deductible Plan

Episode Date: May 11, 2026

Hear money lessons from NerdWallet moms and learn how to budget for healthcare on a high-deductible plan. What does motherhood teach you about money? In honor of Mother's Day, hosts Sean Pyles, CFP®, and Elizabeth Ayoola gather money lessons from NerdWallet moms — including Erin El Issa, Amanda Barroso, Kate Ashford, and Pamela de la Fuente — as well as from Sean's mom, Jeanne. They explore the pressure to keep up with influencers and other parents, the costly belief that core childhood memories can be bought, the role allowances play in helping kids feel the weight of their own money, and what becoming a parent reveals about long-term saving. How do you budget for healthcare when your employer switches you to a high-deductible plan and bills are coming in faster than you can build up your HSA? Sean and Elizabeth are joined by personal finance writer Kate Ashford to answer a question from a listener whose routine doctor visit ballooned from a $30 quote to nearly $500 out of pocket. They dig into the triple tax advantages of HSAs, the math behind comparing high-deductible and traditional coverage, why the first year on an HDHP can feel especially brutal, and what to do when medical expenses outpace your savings. Want us to review your budget? Fill out this form — completely anonymously if you want — and we might feature your budget in a future segment! https://docs.google.com/forms/d/e/1FAIpQLScK53yAufsc4v5UpghhVfxtk2MoyooHzlSIRBnRxUPl3hKBig/viewform?usp=header To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [e-mail]. Like what you hear? Please leave us a review and tell a friend. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, Elizabeth, we have to talk about the newsletter. What newsletter are you talking about, Sean? You mean the new, free, smart money email newsletter? Yes, and I have to say it is so good. It really is. It has clips, episode roundups, and behind the scenes takes from me, you, and our producer, the stuff that makes you feel like you're really part of the show. And listeners, for the record, you actually are part of the show.

I'm going to be sharing personal stuff. You know, I love sharing my business, and I'm going to be sharing parenting tips from an eight-year-old. a single mom perspective. And I am loading up the newsletter with my favorite gardening tips and lots of cute photos from my garden, including my pets, just napping among my flower beds. It's kind of adorable. And the best part is that this newsletter is totally free. So head to nerdwollet.com slash podcast to sign up. For the record, that's nerdwollet.com slash podcast. Come hang out with us. Sean, what are the most surprising things that you realize that you could purchase with a health savings account? I recently learned that you can purchase a mattress with HSA funds.

Where did you see that? Is that for everyone? I mean, there are probably some terms and conditions that apply, of course. But if you have a medical need and you need a mattress, HSA funds might cover it. Also, I feel like my go-to is sunscreen. That's a great one, too. Yes, I learned about sunscreen from you, and I'm still reeling over that. Love, love, love it. But hey, I don't need a mattress right now, but I'm sure I will need one soon.

HSAs are full of surprises. And they have many benefits. Yes, they have triple tax benefits. Yes, they can help you save and invest for future health care expenses. But how do you actually budget for them in real time? If you stick around, we're going to be answering a listener's question about how to budget when you switch over to an HSA. Welcome to NerdWallet's Smart Money Podcast where you send us your money questions and we answer them with the help of our. genius nerds. I'm Elizabeth Ayola. And I'm Sean Piles. Today we're talking about managing funding

and HSA with current medical expenses and how you balance both. But first, before we get into that, we're talking about Mother's Day, which was yesterday. And it's one of my favorite holidays because I love my mom. She's very sweet. We have a good relationship. And she taught me so much about money. But as we also know, being a mom teaches moms a lot about money too. So today we're going to hear some great lessons about what motherhood can teach all of us about money. We are. I have met Sean's mom guys and she is so sweet and fabulous and relatable. And I could go on and on. Shout out to Sean's mom if she's listening. Shout out to Jean. My little mom. She's like 5'1 and loves Grateful Dead.

I love it, love it. Okay. But on that note, today we have a kind of special opening segment because we have curated some videos and some money tips from moms who are here at NerdWallet and also from Sean's bomb. So we'll be getting a little cameo from her. Okay, well, let's get into the first lesson here. Hi, I'm Erin Alisa. I'm a senior data studies writer here at NerdWallet. And my motherhood money lesson is actually something I learned in childhood

that I now have to remind myself as a parent. You can't buy your children's core memories. Raising kids is expensive. I'm not going to say it's not. I roll my eyes every time someone says that it's just as expensive as you want it to be. No, it's expensive. but it's often made more expensive by our desire to give our children experiences we think will shape them as they grow up.

But really, no matter how much we spend, we don't get to pick what they'll remember and how they'll remember us. I went to Disney World as a kid. There's photo evidence attesting to that. It happened, but I don't remember a minute of it. What I do remember for my childhood is a lot less flashy. It's eating big bowls of fruit salad on the porch swing with my mom and snuggling with her while listening to the Christmas song, Silver Bells. It's my dad teaching me a card game on a sick day and reading me Fox and Sox over and over again

because it made me laugh when he got tongue-tied. Go on the trips you want. You know, these big trips can be great. I've been to Disney with my kids. It's fun. But know that the memories your kids cherish may be those that didn't cost a thing. What a sweet lesson.

I'm going to tear up thinking about little Aaron at Disney World having a great time with her parents and also not remembering any of it and really caring most about the things that cost no money at all, just the card games, the time spent together, just having a nice meal hanging out. You don't have to spend a million dollars on an expensive trip because your kid might not remember it at all. What they will remember is the time and the love that you spend with them. Absolutely. And I love what she said about, you know, having a sick day and sitting on the sofa and listening to the same song over and over. And it really reminds me

about Ayo because he loves when we have a movie night and we literally just sit on the sofa. He makes me put my phone away, and we just cuddle and watch TV. And those are the things that he remembers the most. And like you said, they don't cost much money. Yeah, a friend of mine always says that time is love, time together is love. And I think Aaron's story tells us that exactly. Yeah. Can you think of a core memory that you have with your mom that is not money related that you always kind of look back and smile at? This is kind of a weird one, but we grew up in the suburbs. I grew up in the suburbs. I grew up in the suburbs, and we would have to drive a lot to appointments. And I remember reading books in the car a lot with my mom. And we weren't even maybe talking, but we were listening to music that we both

liked. And I was just like had my nose in the Harry Potter book or whatever. And it was just a quiet, peaceful moment of us kind of doing an everyday thing that felt really sweet and nice and secure. And that's what comes to mind right now for some reason. Yeah, parallel play can be free. It sounds like that's what you guys were doing. Yeah. My mom was driving just totally clear. So hopefully not playing too much. Yes, yes, yes. Okay, well, let's go into the next lesson. And this comes from NerdWallet writer Amanda Barroso.

One of the biggest lessons I've learned as a mom is that raising kids is basically a daily exercise in contentment for them and for me. Our budget is not unlimited, unfortunately. And it's easy to feel pressure to keep up with influencers and neighbors, whatever, pushing fancy toys, name, bring clothes, over-the-top holiday gifts. So it's overwhelming, right? and I've had to push back on that. So I shop consignment for my kids. I limit toy purchases. I pack snacks instead of spending a fortune every weekend at the concession stand.

And guess what? They're just as happy. Maybe a little grumpy when I say no, but just as happy. And more importantly, I'm trying to model something that I want them to learn early, which is there will always be people who have more than you and less than you. And peace doesn't come from chasing more stuff. So I'd rather put our money toward what actually last. Family trips, activities they love, saving for their future.

I think becoming a mom made me think much more long term, so 529 plans, and helping with a first car, maybe even a wedding someday if they want to get married. But at the end of the day, I want my kids to remember a childhood full of experiences and to know that what we have is enough. Amanda highlights something so important here, which are how expensive external pressures when it comes to parenting can be, especially when it bleeds into your finances. You want to give your kids all of the best things, but does it always fit into your budget? And most importantly,

does it really matter to them? I also love her emphasis on the idea of enough. That's something that you and I talk about every so often on the show, Elizabeth, is what is enough money, enough stuff where you don't need to be chasing for the better and shinier thing. You can just appreciate what you have. And I really like her point, too, about getting creative around how. how and where you're spending your money, you don't need to be buying brand new clothes because kids grow out of them so quickly. And I just have a great job of really saving a lot of money there.

Yeah. And if you guys haven't listened, she's come on the pod quite a few times to talk about her money saving strategies. And it's always so interesting and stuff we could all learn from. I can also relate with her in terms of mirroring contentment. As we know, kids mostly watch what you do

more than listen to what you say. And I had a season. I have these seasons where I start impulse buying and I have a package coming in every single day. I remember he loves to pick up my packages and open them without me telling him to. And he's just like, what is it another package? What did you get another shirt? Another book?

And those are always little wake-up calls for me in contempt. Do I really need these things? Because he kind of, his undertone, he's usually challenging, like, mom, do you really need these things? And it reminds me the importance of showing him a good example of how not to overspend, really, and to stop buying things he don't need. I knew that reminder too. Don't we all sometimes? All right, let's move on to the next one.

I am Kate Ashford. I am a writer on our core personal finance team at NerdWallet. And I had a hard time with this because I've had kids for a while now. I have a 15 and a 17-year-old. So I did want to say that the moment we were able to give them control of their own money was the moment I felt like they grasped more about it, which seems obvious. But, you know, when you go anywhere with kids, they're always like, can I have this thing? And the second I was able to be like, sure, you have an allowance, you can buy that thing.

And they were like, oh, I don't want to spend my own money on this. And it really puts the decision in their hands. And it is so helpful to help them see that like they're asking you to spend your money, but they don't want to spend theirs. So the allowance thing is super useful. Okay, Elizabeth, I would love to know how you are approaching allowances and budgeting with IO. Oh, my goodness. I am still in the in-between phase, meaning I said I was going to start giving him an allowance. when he was eight.

He has now turned eight. I still haven't started giving him an allowance. But I completely relate with Kate because there was a time where he had built up to money and his piggy bank for money he earned, money family members gave him, and it came time to spend it. And the same exact thing happened.

We'd be in the store and he'd be like, Mommy, can I have this? And I'm like, well, how much money do you have in your hand? He didn't want to spend his money. And he would rather leave the store with his cash most times than spend it or try to convince me that I needed to use my money because I'm his mom and I have more money than him.

So kids hate spending the money, but they don't realize how much work goes into earning it. Yeah. Well, one day they will learn. But at least you're doing the work now of teaching him how to budget and how to understand really the value of your money and how skillfully you need to deploy it to get what you want and still retain what you have too. Exactly. And also the emotions that come along with spending money, right? It sucks sometimes seeing that money leave your hands in it really just kind of jerks you back and can realign you with your values of why am I spending this money?

do I need to spend it and is it really going to bring me joy? That's true. Sometimes it really does, though. Yeah. So that's why impulse shopping is so tempting. I know. Okay. Well, let's get now to another contribution from NerdWallet editor Pamela De LaFuente.

I don't know that I have one money lesson to share, but overall I've just learned that kids are expensive, like really, really expensive. Since becoming a mom almost 12 years ago, I've learned about investing. in their future, which is something I didn't learn about growing up. I had a savings account, but I never had a college investment account. I didn't know what a 529 was until I was a grown adult. So I'm proud to say both of my kids have savings accounts, but my son also has a 529 account, and my daughter, she has autism, she has an ABLE account, both of which I learned about and set up thanks to NerdWallet, and both are super easy to set up.

We just automate our contributions to both. Set and forget. Set and forget. That is one of the best ways to manage your finances and keep growth and keep momentum over time without a lot of effort. I love that, Pamela. Exactly. And I love that she shouted out, well, not shout it out because it's just her experience, but talked about ABLE accounts, which is an account that can be helpful for special needs kids. And it's just such a great way to save money for them because depending on the kind of special need that your child has, they may not be independent when they get older.

and having these financial resources in place for them can ensure that they can live a happy and healthy life too, whether you're here or not. That's right. Okay, well, next up, we have maybe my favorite. I'm biased here, though. This is the lesson that my mom shared. She may have a cute little conversation about it at the end, too.

Mom, welcome to Smart Money. Hi, good to see you. It's so nice having you on. You've been listening to this podcast since the very beginning. I'm so glad we can finally have you here. Yep, thank you. So can you please tell me what raising my sisters in me taught you about money? One of the things I learned when you guys were in high school was that the

public school system did not teach you anything about financial planning or budgeting. So that's why we went to the bank and we set up joint bank accounts. And instead of just giving you cash for allowance money or checks for events at school, I put that money into a checking account for you and you had to budget it yourself. Yeah. And in fact, I still have this account. open and it's how I pay you my part of the cell phone bill. That's right. It's been great. Yes. Well, thank you for teaching me all that, mom. You're welcome. Sean, what was that experience like for you? Your mom just gave you money and said, hey, you can do whatever you want with it. What did that feel like? And how old were you? I was, I think, a freshman in high school. And it was so helpful,

especially because my parents were divorced. So I was driving between their houses and I had to get gas from my car. And I was working a little bit, kind of odd jobs here and there in high school. And, just being able to have a place to see my money was just really eye-opening because, like, you were saying, it's different when you're spending your own money. Not that I had a lot of it, but this was the first time I really felt like I was in control of my life and that I had some kind of grasp on what it meant to manage your finances. And I wasn't the best at it all the time. But, hey, I learned some good lessons the hard way. And I'm still happy to have this account with my mom because it does help me pay my part of the cell phone bill with her.

And it's kind of a nostalgic thing, too, just having this connection. And I'm just so grateful that my mom set that up way back when. Yeah, it sounds like it holds sentimental value. And I feel like I would probably keep that account, too, because why not? Yeah. Okay. Well, here we are at the time of the show where we hear your money lesson, Elizabeth. What has been a mom taught you about managing money?

This was a hard one for me to think about because I've learned so many lessons. but I think the one that I am most proud to teach and teach the most often is that what you teach your kids about money starts with how you live your life, as I kind of alluded to earlier. So I think I'm very mindful of how I communicate about money, how I spend money. I'm a single mom. My son's always in my face, so he sees me when I'm buying things. And I tend to make everything a conversation about money. and it's not always a lesson or a lecture, but just, you know, a conversation.

So, for example, we're in the grocery store. He always wants to scan the groceries. Now I let him scan them. He also gets to see how much each item costs. And he's like, what? A tomato costs $5? Yes, a tomato costs $5. It's expensive, right?

So he's getting more of an idea of how much things cost before he picks them up and puts them down. I'm also very mindful of the language I use, so I try to avoid saying things like, I can't afford it or I don't have it, and I make it about choice. I'm choosing not to do this so that I can do that.

And it's so rewarding hearing him start to repeat that language and say, well, maybe, you know, oh, maybe we're going to the movies today. So that means we're not going to go to McDonald's later because we have to choose. So he's learning things like wants and needs. Sometimes he'll ask me about, you know, rent. And I'm explaining to him the difference between rent and a mortgage so he can learn about debt and borrowing and all these things. So it doesn't have to be awkward. It doesn't have to be this top secret thing. money is a part of your daily life.

So include your child in those conversations. Right. It seems like you really learn the importance of teaching by example. Exactly. And also not just showing the good stuff, but where maybe I have weaker areas too. Like I said, my impulse spending. And I'm just buying stuff and buying stuff. And I love that he's calling you out on that too.

Oh, he calls me out. And he will drag me out the store too. When we're in the mall, he's like, you don't need this. You already have 10 pairs of shoes. Let's go home. He literally does that all the time. I'm like, you know what? You're right.

Let's go home. Mm-hmm. He's doing it right. He is. All right, I have shared my money lessons that I've learned as a mom. And now listeners and viewers is time for you to share your money lessons. Please send us an email at podcast at nerdwollet.com with your money lessons or leave a comment on Spotify as well just to let us know what your lessons are. Okay.

Well, in a moment, we're getting to this episode's money question, which is all about balancing HSA budgeting priorities. But before then, if you have a money question for Sean and I, maybe you are thinking about how to teach your kids about money, maybe you're going through a really difficult life transition that's impacting your finances. Perhaps you want to try some advanced investing strategy that you found on TikTok. Whatever your money question is,

please send them to us on the nerd hotline at 901-730-63. You can call us or text us or leave a voicemail on that number, and that's 901-730 NERD. You can also pop us an email at podcast at nerdwollet.com. Yeah, or maybe you don't have any kids at all and you're wondering how to spend all of your discretionary income. That's my challenge. I wish. I wish.

Okay. Well, yeah, listeners, we love your money questions. The show runs on them. Please send them our way. Now, we're going to get into this episode's Money Question in a second. Stay with us. We're back in answering your money questions to help you make smarter financial decisions. Our question today comes from Markey in Milwaukee who sent us a text.

This year, due to changes in health care policies, my employer switched us to a high deductible health care plan with an HSA. At first, I was excited about having access to an HSA, but I'm starting to feel overwhelmed by the actual costs. For example, I recently went to my primary care provider for a routine illness-slash-injury visit. I was initially quoted $30, but later found out my insurance only covered $85 of the visit, and I now owe about $500 out of pocket. I also attend weekly therapy, and my cost per session has increased from a $30 copay to about $170, per visit. Because I just opened my HSA, I haven't had time to build up savings in it, and my medical expenses are coming in faster than I can fund it. It's gotten to a point where I feel like

I can't afford to go to the doctor. My question is, how should I adjust my budget and financial planning to handle these higher, less predictable health care costs under a high deductible plan? Oh my gosh, I so empathize with you, Marky. I use the HSA and H.D.H.P.2, and that is definitely a tricky one. But to help us answer Markey's question on this episode of the podcast, we are joined by personal finance nerd Kate Ashford. Welcome back to smart money, Kate. Hi, guys. Hey, Kate, as ever, we're having you come on to talk about a thorny, complicated, technical, medical-related adjacent issue.

So, great to have you. Yeah, happy to help if I can. Let's start by explaining a couple of terms, HSAs and HGHPs. So starting with the latter, a high deductible health care plan is a type of health insurance plan that you probably guessed has a high deductible. For 2026, that means that your deductible is at least $1,700 for individual coverage and $3,400 for family coverage. And the maximum that you'll pay out of pocket is $8,500 or $17,000, respectively. And an HSA, or a health savings account, is a type of savings and investment account that you have access to only when you are in a high-deductible health care plan. HSAs have some amazing tax advantages.

So, Kate, can you give us any more info about HSAs? Anything else you want to add about HGHPs? Yeah, absolutely. So you'll hear a lot of things about HSA's being triple tax-advantaged, and that's because when you put the money into your HSA, it comes out pre-tax, or if you put money in after-tax, it's deductible. All the money in the HSA can be taken out tax-free, as long as you're putting it toward qualified medical expenses,

and essentially most medical expenses are qualified. HSAs usually have the option to invest the money. So as long as you are investing the money, if you earn anything on that money, that investing earnings is tax-free as well. So as an account goes, it's really like sterling. It's got a lot of advantages. And it follows you from job to job. It rolls over from year to year.

So it really is a great account all the way around. Yeah, it's always impressive how much you can use your HSA for. You can even buy things like sunscreen with your HSA funds. Yeah. Why didn't I know that? Now you do. My tube is almost ran out. So I always buy some sunscreen with my money.

I always like to tell people you can buy pure. periods supplies. What? That's a year? Yep. I just bought, okay, TMI, but I just bought some period supplies yesterday and they are expensive. They are expensive. Would be great to live in a world where that was free because everyone needs that stuff at some point.

That's right. Okay. Well, another amazing benefit of HSAs is that you can reimburse health care expenses that you incurred while you were on your high deductible plan using HSA funds years down the road. So say Markey incur some expenses right now, doesn't want to use the HSA funds to pay for them, if they keep all of their receipts, they can get their money back at a much later date once they have more saved up. And that can be a really helpful way to clause some money back and get some extra cash in retirement. It actually sort of functions like a whole different kind of retirement plan. And you're going to have health care expenses in retirement.

So there's no fear that you're not going to be able to get this money back. I'd also like to add that while the numbers for deductibles and out-of-pocket maximums that you just went through are they're high. They're scary sounding. But high deductible plans usually have lower premiums than. your traditional HMO and PPO plans. And a fair number of employers also will put money into your HSA, which also kind of helps with the costs. So, and furthermore, a lot of high deductible plans don't have the deductibles as high as they can go legally. So it's not necessarily as scary as it initially sounds. Yeah, one thing I'm curious about is how much Marky is putting into

their HSA and what, if any, match they're getting from their employer because it makes it so much easier for me to contribute and save in my HSA. Yes, the match is key. So it would be nice to know if Markey's getting one. A big decision anyone who has an HSA has to make is whether they're going to use the funds in the account for ongoing medical expenses or they have another option, which is to leave it for years and years and hopefully use it for health care expenses in retirement and hopefully invest that money so that it can grow.

The latter option can be really appealing to some people because you can generally invest the funds that you have in a health savings account, and the tax advantages we outlined earlier are there as well. But sometimes you just need to cover a medical bill now, like in Marquis case, and the funds in an HSA might be their only option. So, Kate, how do you balance this decision? So this is really just going to come down to your financial situation, right? So if you can pay your medical expenses easily without putting them on a credit card

or cleaning out your emergency fund, then you may want to consider investing within your HSA, because it does have growth potential. But it depends on your time horizon. If you are like, I can pay this out of pocket right now, but I'm going to need the money in my HSA within 12 months, the juice is probably not worth the squeeze on that. You probably should just take the money from your HSA and pay the bill.

Investing probably isn't going to net you much of a gain for a short-term need. If you can let that money sit for a couple of years, three to five years or more, or, you know, until retirement ideally, but of course not everyone can do that. Investing might make more sense. But I would like to note, just in money than why, check out the investment arrangement for your HSA as well. Those accounts do offer investment options,

but a lot of them require that you hit a minimum balance, like $1,000 or $2,000 before you can invest. And some of them come with administrative fees, which can kind of eat away your earnings. It may not be the thing that you want to do right away. I've also find the interfaces are not super friendly. I've had a little trouble with mine in that way. So I've actually decided not to invest mine.

I think it's really great for those first two tax advantages, and the third tax advantage kind of depends on your kind of you're kind of with investing and the interface you're working with. Yeah. Folks should also know that they might be able to open an HSA through any old bank outside of the institution that they are kind of presented with through their employer. As long as you're in a high deductible health care plan, you are able to access an HSA,

and you're not limited to the one that you have through your employer. So you might want to compare your investment options and fees from what your employer's offering you and what you might be able to get at another bank. Okay. Now, when it comes to high deductible plans, they're often best for those who have very minimal health care expenses or those who have a lot of health care expenses. And those in the middle, it seems kind of like Marky is there, and I'm actually kind of in this place too right now. People in the middle can really feel the pinch.

It's kind of the worst of both worlds here. Kate, can you expand on that? So you kind of had to do the math on this, and it's a little tricky, but we're going to do it. So one thing to keep in mind overall is that premiums for a high-eductible plan tend to be lower. And people tend to discount that because they don't see that money coming out of their pay. But you really do have to think about it because if you're paying $200 less a month, that's $2,400 less a year, which really helps that math work out a little better. Plus, your employer might be putting some money into the HSA. So you might start out paying less premiums, getting money from your employer.

And if you're using minimal health care, you're probably not going to spend very much to begin with. That's a really helpful point. And I think people who are just switching over to an HGHP with an HSA, they might want to look at, at their pay steps from the year prior when they were on a different kind of plan, see just how much was coming out of their paycheck to pay for premiums on a regular basis, and consider contributing that to your HSA

because it's basically netting out for you there. Again, if you've got sort of minimal health care expenses, one thing to know about HGHPs is that your annual physical and vaccinations are usually covered by the plan. So if you're not spending a lot of health care anyway, you're probably not going to spend any more than you're already saving on premiums

and maybe an employer contribution. So that math kind of works out. Yeah, my son, and I, I, well, my son, obviously, he's my plus one, and he's my plus one on my health care plan, too. And we don't spend much on the doctor every year, thankfully. So we usually go for our checkup. So I actually have not hit my deductible so far. And I've had HSA and HDHP for about three years now.

And like you said, Kate, I also get an employer contribution. But yeah, I guess the point is it's easier for me versus Markey because I don't have to go to the doctor often. So I have time to kind of build up that savings. All right. So people who don't use their health care a lot aren't going to be spending much regardless, like myself. And they should consider themselves fortunate, like myself. But it is a different story for people who end up spending a lot on health care, right? Because they have to pay a high deductible, but it can actually end up costing them less overall than if they went with a non-high deductible plan.

So it does seem counterintuitive, but for people with a lot of health care expenses, you're probably going to find that you're spending a lot out of pocket either way. but your expenses are less kind of out of the gate with a high deductible plan. You're playing less in premiums. You might have an employer contribution. So you might be spending less overall. And in fact, that's been true for me. We are high health care users. We are high health care users every year.

I don't know. We seem to be high maintenance. But this actually makes things really predictable for us because we know we're going to hit an adoptable every year. So we make sure we have enough to cover that. And after that, everything is kind of covered. We usually hit it about mid-year and from July on. smooth sailing. There's no more spending on health care for us. That is a lot of spending on

health care, considering that you're, you know, your family of how many people? We are a family of four, but, you know, it just takes a few things. Allergy shots are surprisingly expensive, depending on when you're ordering that stuff. I had a surgery one year. I tend to injure myself. I get a lot of physical therapy, so it all kind of adds up over time. I want to go deeper into people in that less desirable middle area that we mentioned before, where you're spending out of pocket on your health care and it's beginning to strain your budget, but you haven't yet hit your deductible, or you might not for the year, but you're still kind of chipping away that deductible, hoping that maybe at some point it'll become easier for you. So how should

folks square this circle? This is a tougher equation. So it's a cost-benefit analysis. You're going to need to think about how often you see the doctor, how much are you typically spending each year for care how much are you saving on premiums again by going with a high deductible plan and does your employer give you anything for your HSA? And importantly, do you have enough money to cover those upfront costs because high deductible plans may be cheaper, but those costs are very front-loaded. So I like to think about this is kind of like a math problem when I explain this to people because people don't have a good sense of these plans. Let's say that you save $2,000 by going at the high-deductible plan and your employer puts $1,000 a year in

your HSA. So you're essentially already just out of the gate $3,000 I had on health care costs, and you haven't seen a doctor yet. So you have to kind of think about, do you think you're going to spend more than $3,000 on health care this year, just sort of estimating? And considering that, of course, this is all guest work because anything can happen at any time. But based on previous experience, you know, do you think you can come in under that number, in which case it's still cheaper for you. Yeah, I think what people are experiencing is that it's actually really psychologically painful to be spending the money out of pocket versus when you're not seeing the money when you're on a non-high deductible plan. It doesn't feel like you're spending

anything oftentimes because it's just already out of your paycheck before you even see the money hit your account. So I think you're right that people need to sort of reframe their thinking around premiums and how much you're actually saving because they are still likely to come out ahead with a high deductible plan. And then, Kate, I have a question as well. I have a question as well. I love that Marky said that they were excited to start, you know, a health savings account. But what about the pre-planning before opening that health savings account and kind of going, do I have enough to fund my medical expenses before I build up the amount, you know, that I need monthly? This sort of goes into the same sort of thinking around emergency funds, right?

We have to make sure we have enough cash to cover that thing that's coming up. So this can be a great plan for people, but mostly it's a great plan if they have the money to cover those upfront cost. I mean, I've had a hydidipal plan for years. It is always the best plan for us. It is always the cheapest. But those first several bills of the year are always like, what are we doing? Yeah. Why do I owe this? And it feels like it just keeps coming. And I have to keep in mind like it's fine, it's fine, it's fine. It's cheaper overall. But it is mentally, it's hard. Yeah. And you have the money set aside for this. But beyond it being difficult in the beginning of the year, your first year alone on a high deductible plan can be especially difficult because you don't have that money

saved up in your HSA. And you may not know what your health care expenses are going to be because health care expenses can vary greatly from one year to the next. So you're still getting a feel for this new kind of insurance coverage. And I would really recommend that Marky look back and document their doctor's visits for maybe the past 12 months and think about how much they're going to be paying throughout the year to take some of the guesswork out of the equation. It's smart to put together as much information as you have because health care is a giant guess, right? And no one plans to have an emergency or a big health revelation. So you just, you have to do the best with what you have. Yeah. And knock on some wood to hope that you stay healthy there. Exactly.

I also really empathize with Markey's situation, you know, they're going to the doctor, thinking that this is going to cost a certain amount, only to find out that it's going to cost them a lot more. Don't get me started. Yeah. That can really throw your budget into a tailspin. And I just had a similar situation where I went to a couple of doctor's appointments and they couldn't tell me how much it was going to cost me. I went to a physical therapist and a sports acupuncturist, kind of specialized people, but I needed to see them for my legs. And two medical bills and $500 later, I found out just how much those were going to cost me. So what I'm wondering, Kate, is whether there is a reliable and maybe even easy way to know how much a medical appointment is actually going to cost you.

Sean, I wish I had a good answer on this, but the answer is no. Yeah, I had a feeling that was going to be the case. These plans were originally kind of introduced with the idea that we would be able to shop for our own health care. Guess what? No, there's really no way to do that. Unless you're doing something really specifically straightforward, like a blood panel from, you know, Quest Labs or whatever, and you know that this blood panel costs this amount of money. I once tried to get an MRI and I tried to find out how much I was going to pay for the MRI.

I wrote a piece about it because I was. I was like, surely this will, I'll be able to find this out. Could not. Could not get an answer from anyone. I called seven or eight different places. No one could tell me how much the MRI would cost. Several of them were like, it'll just be this much after your insurance covers it. I'm like, no, no, see.

I cover that first part. So, yeah, people don't, they don't fully understand this kind of plan. No. And I just want to say I choose when I'm American versus British. And when it comes to health care, I'm British. Because how ridiculous. The first time that I came back to the doctor after moving back from the UK, I was really, really vexed with a poor front desk person who couldn't tell me how much my treatment

was going to cost. How am I supposed to shop around if you cannot tell me how much my treatment costs? So do you go back to the UK for healthcare ever? Well, it's complicated. I used to, but I can anymore because I'm now an American. So right now I'm American. But, you know. All right, let's get onto the budgeting part of Markey's question.

Now, in an ideal world, they would be able to put some money into their HSA, hopefully get a match from their employer to help build up that fund, and then they could leave it to grow over time, as well as cover regular visits out of pocket. But that does not seem feasible for Markey's budget right now, which is why they are writing us. How would you handle this situation and what advice do you have for Markey, Kate? Yeah, this is a tough one because Markey's already into the plan year and they're getting hit with bills. and I'm here to say that feels awful, and particularly if you don't feel like you have the money to cover them. So, I mean, typically my advice for people considering an HDHP is make sure you have enough money to cover that cash,

but given that we're now here, Margie's kind of behind the eight balls. So Markey would sort of proceed like someone who is having trouble paying medical bills. That would sort of fast forward them into that kind of situation. They would maybe talk to the medical providers billing people, see if they can set up a payment plan, see if it's possible to negotiate, a lower rate. I've never really been successful at this, but I've tried and possibly it could work. Some places have financial assistance available. Payment plan is probably going to be your most successful approach. Generally, there's no interest in that kind of thing, so you can just

spread those payments out over time, and then maybe it feels a little bit more like your typical medical expenses. I want to talk about the idea of saving money by foregoing medical care, because it seems like Markey is considering that, which makes me nervous for them, because Because we know that preventative care is often one of the best things that you can do for your body. And also it saves you a lot of money over the long run, too. And especially if Markey is paying for therapy, your mental health is really important. So I would urge them to maybe not skip out on taking care of your mind and your body, but maybe try to cut cost elsewhere.

How do you think about that balance, Kate? To the extent that they can find ways to get care for less, possibly. Certainly there are clinics that offer easier types of care for whatever your kinds of issues are. Sometimes employers offer mental health care that is subsidized. So it could be that there are other places to find that care for less. And possibly also, you know, if you explain your situation to your providers, they might agree to go to a lower rate for you for some period of time until you can kind of catch up on that. Okay.

And then what about how to handle expenses going forward? Kate, because it seems like Markey has more medical bills to come, and we don't want Markey to go into debt. Markey's going to have to figure out how to either put money away toward this kind of plan next year or think about how to cut expenses elsewhere, because this is going to be an ongoing expense if they're going to have a high-deductible plan. If this is not a financial structure that works for them, they might want to go back to a traditional HMO or PPO. Yeah, although I get the impression that their employer kind of forced them into this high deductible plan, in which case, maybe they would want to shop around for another job, which is easier said than done in this

current market. Another job. I wasn't expecting that. Oh, boy. That's tough for advice. I really wish we could just, uh, reformer health care system. Yes. If the individual market was less crazy going out to the individual market's not a better

option either. Sometimes I wonder, do they even care about us? Do they even want us to be healthy? Because why make it so difficult and expensive? Why? Great questions. We'll have to tackle that on our political podcast. But I'm thinking that these healthcare expenses might be a good candidate for a sinking fund if Markey has a little extra room in their budget. They could put just enough into a specified savings account for their deductible. And people might be thinking, like, isn't that just what an HSA is for?

And the answer is like kind of yes. but personally I prefer to keep my money in my HSA and use that as my longer term retirement health care fund. And for expenses that I'm paying out of pocket, like my bills I mentioned earlier, I'm just kind of biting those and paying it out of my general checking account, which isn't fun to do. But hey, at least I have my legs in a working order and that's what the money is for, right? Yeah. So to the extent that this can be something they think about going forward and plan for going forward, that's going to be the better approach. Certainly, now they know how much they're paying for things. Once you see that you're paying this much for therapy,

you know that when you have therapy and you haven't hit your deductible yet, that's what you're going to be charged. You can kind of plan for that. Maybe you have therapy every two or three weeks instead of weekly. There are decisions to be made. So just something to think about for the long term. Okay. Well, if this were your money, how would each of you handle balancing paying your current health care expenses and saving in an HSA? I would do a combined approach. The first thing I would do is look for ways to lower my current health care expenses, like Kate said. Shopping around can be a headache when no one can tell you how much your care is going to cost, but I would still do it anyway. I would also look back, as Sean said, at how much I had been spending on premiums and put that money away

possibly into a high-old savings account so that I could get interest on that money for as long as this in the account and just essentially look for ways to shave my budget so that that money can go into my health care expenses. And also, hopefully their employer is contributing. But if they weren't, then I might look at not using a high deductible health care plan in the following year because maybe my health care expenses are just too high. Yeah, I think I would do something really similar. I'm going to want to save for retirement health care expenses, but also try to reduce my current health care, I can. Again, you don't want to avoid treatment because your body needs that, but you can't be breaking your budget every month just going to the doctor. And unfortunately, that's what the system

does to us oftentimes. Boo. Yeah, we try our best to pay our expenses out of pocket and keep the money in the HSA. But recently we had to take out a big chunk because we were like, wait, we've had all these bills from an out-of-network provider and we need to cover them. So, you know, it's a decision that we've kind of made as we go. And so far, it's worked out. But again, I, I also get an employer match. That's helpful. It is very helpful. I think what we're underlying here is how personal decision this is, and there's no real one right way to do it. Just figure your way through it, and you can adjust over time. Yeah. All right. Well, Kate, thank you so much for coming on and

talking with us again about another thorny topic. Thank you for having me. I always enjoy it. That's all we have for this episode. Remember, listener, that we are here to answer your money questions, so please send them to us. You can call us or text us on the nerd hotline at 901-730-6373. That's 901 730 nerd. You can also email us at podcast at nirpollat.com or drop us a comment on Spotify or YouTube. And come and kick it with us next time. We are going to be getting in Sean's business

and we're going to be discussing how to use travel points to fund a summer vacation. Make sure you listen in case you want to know where Sean is going for the summer. I don't know if he's telling us, but I'm assuming that he is. Oh yes, I will tell you. All right.

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