As any new college graduate will tell you, managing a budget usually means living on ramen noodles, taking the bus and sometimes living without insurance. But without insurance, these young adults may be setting themselves up for overwhelming bills should something happen.
Health Insurance Options
What would happen if an accident or health scare occurred? According to the Employee Benefit Research Institute, younger adults are more likely to be uninsured than older adults. Between the ages of 21-24, 40% of men and 30% of women were uninsured in 2009.*
Many health insurance companies are changing the way they offer insurance to young adults. Some plans offer more affordable options for single, healthy adults that are designed to protect buyers from financial loss. They may offer better rates if you regularly attend the gym, aren’t planning for a family (no maternity health included) or are a nonsmoker.
Another benefit of being young is the option to stay on a parent’s plan. If you are unemployed or aren’t offered health insurance at your job, you may be eligible to stay on a parent’s insurance until you are 26. By staying on a parent’s plan, you can avoid the risk of going into debt from high medical bills.
Protect Your Belongings
On top of protecting yourself with health insurance, having renters insurance is a must for preventing large bills. When you rent, your landlord’s insurance won’t cover your possessions. Start thinking of everything you own in your rental. If there was a fire, theft or other disaster, could you replace everything without insurance? Most likely not.
By planning ahead with insurance, you can be prepared if – or when – something should happen.
- * Source: EBRI Issue Brief, No. 347, September 2010,
MANAGING YOUR BUDGET
Taking these small steps can keep your budget on track and help you avoid unexpected costs.
- Set up automatic bill pay online. Your recurring bills can be paid without you having to remember to pay them on a certain day – thus eliminating late fees.
- Set aside money each month. Automatically transfer a small amount to your savings account each month to build an emergency fund.
- Focus on credit. Make sure to check your credit report regularly for errors. You can order free reports each year at www.annualcreditreport.com. Paying bills on time will make you a better candidate for loans.
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