It is very easy to point fingers at people who have chosen shopping spree as a way of life when it is about consumer debt. However, the real reason behind Americans getting caught in financial trouble and seeking payday loans online is not in any way related to the inability to resist temptation. It is in fact a matter of medical debt.

As per the Kaiser Family Foundation (KFF), there are over a quarter of Americans who struggle to pay their medical bills. This even includes those who have insurance, whether through an employer or independently. As a matter of fact, the No.1 reason of personal bankruptcy filings is medical debt and in 2014, approximately 40% of US adults ran into debt as a result of medical issue.

However, the shocking part is not that Americans have a hard time dealing with medical debt, but it is the extent at which even insured individuals struggle. The New York Times had reported last year that an estimated 20% of Americans under the age of 65 with health insurance had a lot of trouble paying their medical bills. Of those, 42% took up an extra job to cover their expenses and 62% claimed that most or all of their savings were used up to tackle healthcare costs.

Health insurance is not a surefire way to prevent Americans from falling victim to medical debt. But, you can take steps to build an emergency find so that you can safeguard yourself from unanticipated bills.

Emergency fund can offer relief

Not having enough savings to cover the unexpected costs is one of the main reasons why a lot of people get into medical debt. As per the GoBankingRates survey, sixty-nine per cent of Americans have less than $1,000 savings while 34% do not have any money in the bank.

Fortunately, there are things that you can do to have adequate savings. To start with, you can create a budget to track your spending accurately and also find ways to cut corners. Then, you can decrease spending from all categories that are not essential living costs, such as restaurant meals, leisure and even cable.

But, if that does not do the trick, you will have to make more significant changes like, unloading a vehicle, downsizing your living space or working a side job for the generation of extra income.

Bankruptcy creates future problems

It is best to avoid filing for bankruptcy because it is going to stay on your record for ten years. During this time, you will face a lot of difficulty finding an apartment to rent, secure an auto loan or even finding a job. Another thing about bankruptcy is that it takes a lot of money to file for bankruptcy. This is because the bankruptcy codes are quite complicated. You will have to hire a lawyer and also take care of any filing fees that you might incur along the way.

Moreover, there is really no distinction between filing for bankruptcy due to reckless spending or medical debt. Regardless of what it happened, bankruptcy filing is going to remain as a black mark on your record.

It might look tempting to fallback on the option of bankruptcy when your medical bills go out of control, but it is better to save up for a rainy day to help you cover the expenses. You can also closely analyze your health insurance plan and see if it would make sense to opt for a more comprehensive coverage.

Another great way that you can save some money is by not ignoring your health issues in its early stages. This is when health conditions are least expensive and easiest to treat.

Do not overlook the Social Security bonus

Retirees often tend to overlook their $16,122 social security bonus and they fail to include it as a part of their retirement savings. All you have to do is learn the tricks of how to unlock the Social Security benefits. If that also does not work, you always have payday loans online to rely on.

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