DEAR DAVE: My wife just had our first child. As a result, we now have $2,500 in medical bills not covered by insurance. We've got $7,000 in our emergency fund, and I make about $25,000 a year. Should we dip into our savings or set up a payment plan?
Congratulations on your new baby! I'd write a check today and knock out that hospital bill. This definitely falls under the heading of “emergency” in my mind, so pay the bill and jump back into rebuilding your emergency fund.
You've done a good job of saving on $25,000 a year, but let's look around and see what you can do about making more money, too. I'm sure you're a hard-working guy, but the truth is it's going to be pretty tough for even a small family to make it on what you're bringing home now.
Life happens, and the unexpected can become a common occurrence when there's a little one loose in the house!
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