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Current Financial Situation: An Overview

I am currently focused on saving up an emergency fund that can cover six months of expenses. Initially, I had built up a six-month emergency fund for myself. However, after getting married, our financial circumstances have changed, resulting in combined expenses. Additionally, we purchased a car, which further increased our monthly outgoings.

Current Financial Allocation

Here’s a detailed breakdown of how my income is currently allocated:

• Retirement Contributions:

  • I am contributing 15% of my income towards my 401(k). This is a critical step toward ensuring financial security in retirement.

• Roth IRA Contributions:

  • I am also maxing out my Roth IRA for this year. I initiated this investment prior to combining finances with my wife, and I have maintained automatic contributions. Once I reach my savings goal of six months’ expenses, I plan to start contributing to my wife’s Roth IRA as well, following the advice of financial experts like "The Money Guy".

• Health Savings Account (HSA):

  • Additionally, I am contributing the maximum allowable amount to my HSA. My strategy is to invest these funds rather than spend them immediately. I plan to save receipts for future reimbursements, leveraging the tax advantages of the HSA for as long as possible.

• Employee Stock Purchase Plan (ESPP):

  • I am participating in an ESPP, which allows me to save between $800 and $900 each month. However, these savings are received in a lump sum every six months. If anyone has questions about this plan, I’d be happy to explain how it works.

• Current Savings:

  • At present, my total savings amount to nearly $13,000. Ideally, I aim to accumulate around $25,000 in order to cover six months of expenses. This means I’m approximately halfway to my goal.

• Monthly Savings:

  • Additionally, I am consistently saving around $650 each month, which contributes positively to my overall savings plan.

Current Account Balances

Here’s an overview of my current account balances:

• HSA: $8,400
• Roth IRA: $13,000
• 401(k): $26,000
• Savings Account: $12,800

Upcoming Medical Expenses

Recently, I underwent a root canal procedure, which cost about $700. I withdrew this amount from my savings. Following this, I’ll need to visit my dentist for a permanent crown, which is estimated to cost $1,200. Unfortunately, my dental insurance has reached its maximum coverage for the year, meaning I will have to cover this expense out-of-pocket.

Seeking Financial Advice

I would like to gather some opinions regarding whether I should withdraw the funds for the dental crown from my savings account or utilize my Health Savings Account (HSA) for this expense instead.

On that note, I have been exploring tools such as the AI Legalese Decoder to help clarify any potential legal implications surrounding the use of my HSA for this medical expense. The AI Legalese Decoder simplifies complex legal language, allowing me to understand what is permissible with my HSA funds. This technology can help ensure that I make informed decisions regarding my healthcare financing options without misinterpreting any legal jargon or regulations.

If any part of my situation is unclear, please don’t hesitate to reach out. I composed this on my mobile device rather quickly. Thank you for your insights!

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