Search Results for “ignore-your-budget/573/brown-bagging-your-way-to-savings/medical-costs-and-choices/experiences-v-stuff/future-dreams” — Page 2

Happy Father’s Day: The Benefits of Being a Parent Can’t Be Measured

It’s true that the benefits of a parent cannot be measured or quantified in any meaningful way. It’s hard to put a price on the emotional commitment and special experience of raising a child as a parent, some of which may not even be realized by the parents themselves until afterwards. But it is undeniable that the experience of parenthood is a rewarding and special time in someone’s life.

An icon illustrating a parent and child (Photo credit: Wikipedia)

For one thing, being a parent can you relive your childhood through your child. There are very few experiences in the world that are as intimate and vicarious as a parent who is raising their newborn child into an adult. Your child’s experiences become your experiences, their safety and learning becomes your priorities, and their success, ultimately, become your own success as a parent. You can rediscover the parts of your childhood that you may even have forgot as your child experiences them for the first time.

As a parent, you are also the center of the world for your child. This can be a tremendous source of self-confidence as well as incentive for self-improvement, to know that another human being sees you as their ultimate role model and will grow up in your footsteps. Just imagine the sense of wonder and awe with which you regarded your own parents when you were a child, and apply them to your child. That is the way they will see the world for a long time, with a constant sense of amazement and curiosity. The mundane becomes extraordinary and fantastic to a child, and a parent is part of the magic and the child’s discovery of the world.

In addition, parenting is a rewarding experience because you involved in the creation of a life and the raising of your child with your partner. There is a great amount of pressure, but also a sense of pride as your child’s characteristics and worldview will, in a large part, be derived from your interaction and education of them. All the things that you wish you had done in your childhood, or wish you had experienced or learned about earlier. These are all things that you can teach your child. As a parent, you are your child’s most important friend, teacher and role model. That is a tremendous source of empowerment and responsibility. But the reward you can get out of being a great parent is a new life in the world that you shaped with your words and actions. What you teach them becomes their most important life lessons, and your actions as a role model becomes the standard by which they live the rest of their lives.

So yes, the benefits of being a parent cannot be measured in conventional terms. But these benefits can definitely outweigh any worldly possession or unit of valuation. Parenthood is an emotional, spiritual, intellectual and educational experience that very few other experiences in the world can replace or even come close to imitating.

Dreams

Finance, Life

Ever since she was a little girl, my wife has wanted to be a horse. Err, work with horses.

The problem is that most jobs working with horses pay horse-crap. It’s hard to raise a family on a stablehand’s income.

Her alternative was to own horses. This comes with a different set of problems. The biggest problem is that we live on 1/8 of an acre in a first-ring suburb. That’s not a lot of room to graze, though I would be willing to give up my spot in the garage.

I rock like that.

Boarding a horse costs a minimum of $200 per month. Two girls means two horses, otherwise, they won’t both be able to score in the saddle club. For the math challenged, that’s $400 per month, plus about $300 in preventative vet care per year.

$5100 for a year of boarding an extremely obsolete car.

Then, you need a trailer to get the horse to shows. You need saddles and reins and and short-legged stirrups and feedbags and muck-rakes and brushes and combs and hoof-cleaning-thingies and other stuff that will catch me by surprise for years to come.

Expensive.

My rough estimate is that it costs at least $10,000 to get into horse ownership, and that’s not counting the horse itself.

You can buy a horse for well under $1000 if you aren’t concerned about registration or speed. A 15 year old horse can last 10-15 more years, so it’s not money down the drain.

That’s $12,000 to get in and $5100 per year to stay in. Minimum.

Never let it be said that I’m not a pushover. Last month, we bought an SUV that can pull a horse trailer. Last weekend, we bought the trailer. That’s two major steps towards making my wife’s dreams come true. The rest of the plan culminates in a hobby farm in the sticks.

There are several steps in between.

I just need to put the brakes on every other step. We’ve been offered the free use of one pony next season, and we may be able to get another for the same price. Beyond that, we need to be patient. There will be no ponies purchased until the new truck and old mortgage are paid.

Period.

Cutting Healthcare Costs

Finance

It’s not a secret that health care can be expensive. Many people pay two and three digit bills for their prescriptions. A visit to the doctor’s office can hurt the budget. Glasses cost hundreds of dollars? How can you cut this cost?

Drugs

If possible, go generic*. There is no difference between Trazorel and trazadone, aside from the cost. Wal-mart, Target, and many other stores offer common generic prescriptions for $4-5. When you are talking to your doctor, ask if there is an drug option that has an available generic. When you are talking to your pharmacist, ask if there is a generic alternative available.

Get the price match. The Cub Foods pharmacy near me matches the Target generic drug price, giving us $4 generics for the asking. This is often an unpublicized deal, so make sure you ask. If your pharmacy will not match nearby prices, consider going elsewhere.

See if there is a 90 day plan. Many insurance companies sponsor a 90 day prescription plan that gives you a 90 supply of drugs for the 60 costs as long as you are willing to accept the drugs by mail. For expensive prescriptions, this 33% discount can be a substantial savings.

Physician

Does your clinic offer online consultations with your doctor or nurses? Some clinics offer a chat or email option to talk to your doctor without requiring a visit that will add fees and copays to your expense sheet. Most clinics and hospitals have a free nurse line for basic questions, like “When is my baby‘s fever dangerous?” It’s a great chance to save some money. I know, from personal experience, that they won’t be shy if they feel you need to come in, but they generally won’t try to convince you to come in if aspirin will fix the problem.

Stay in-network. Check with your insurance company to make sure the doctor you want to see if in your network and therefore, available at the cheapest out-of-pocket price. If not, and you really want that doctor, ask your insurance company if they accept nominations for the network and ask your doctor if he’d be interested in being nominated.

Stay home for your cold. Don’t go to the doctor for every minor problem. The best remedy a doctor can give your for your cold will reduce it to a seven day malady. On the other hand, if you do nothing, it will go away in about a week. Why waste the money? This counts double for the emergency room and urgent care. Strep throat is not an emergency. Wait until morning and go to the clinic, paying the lower fees instead of the large ER costs. Make an appointment for a doctor visit, if possible. Urgent care is billed the same as a regular visit, but most insurance plans double or triple the copay for urgent care visits.

Cash Flow

A Health Savings Account(HSA) is a pre-tax account to save for qualifying medical expenses similar to a Flexible Savings Account(FSA). The main differences are that HSAs are only available for people with high-deductible insurance plans and do not have to be spent on medical expenses. Non-qualifying expenses move from pre-tax to post-tax, meaning you will be charged federal income tax for non-qualifying withdrawals. FSAs are “use it or lose it” plans. If you don’t use it, it will go away, usually at the end of the year. That makes December a great time to stock up on over-the-counter medicines and possibly replace your eyeglasses, as both of those are qualifying expenses. Find out if you have either option available. If you use either one, set aside a place to store every imaginable medical receipt, so you can be reimbursed. Make sure you understand the FSA-eligible expenses.

An Ounce of Prevention

Get routine checkups. The earlier you find a problem, the more options you have. This goes for everything from cancer screenings to blood tests. Get a physical every year and know what is happening with your body. We may be living in the future, but replacement parts are still hard to come by.

Maintain Your Health

It’s cheaper to be healthy. Eat right, exercise, quit smoking.

I enjoy a good meal. It’s one of my favorite things. I won’t cut rich foods out of my diet, so we reduced portions. Beyond the first few bites, the flavor isn’t nearly as enjoyable or even noticeable. There’s no more enjoyment for huge servings than small ones.

Get more exercise, even if it’s just a 2o minute walks twice a week parking on the far side of the parking lot, or taking the stairs instead of the elevator.

Vision

Go online. This one is worth a write-up all by itself. I have 6 pairs of prescription glasses–all varieties of frames and coatings–that have cost a grand total of about $150. There is no noticeable difference between my cheapies and the designer alternatives. While I work on the write-up, the best site to introduce you to the concept of online glasses is GlassyEyes. Reviews, coupons, and discount likes. They have step-by-step instructions on turning an intimidating idea into a simple and cheap solution to an expensive problem.

How do you save money on health care?

* There are no generics available on new drugs until the initial patent expires. This gives the pharmaceutical companies a change to recoup their research and development costs. Without this patent period, new private drug research would evaporate. Don’t hate the brand names, but don’t show undue loyalty.

Money Problems: Day 9 – Health Insurance

Finance

Today, I am continuing the series, Money Problems: 30 Days to Perfect Finances. The series will consist of 30 things you can do in one setting to perfect your finances. It’s not a system to magically make your debt disappear. Instead, it is a path to understanding where you are, where you want to be, and–most importantly–how to bridge the gap.

I’m not running the series in 30 consecutive days. That’s not my schedule. Also, I think that talking about the same thing for 30 days straight will bore both of us. Instead, it will run roughly once a week. To make sure you don’t miss a post, please take a moment to subscribe, either by email or rss.

On this, Day 9, we’re going to talk about health insurance.

The first thing to understand is that there is a difference between health care and health insurance. Health care is what the doctors do. Health insurance is when the insurance companies pay for it. Or don’t. They are not the same thing. I won’t be addressing who should get care or who should be paying for insurance. That’s political and I try to avoid that here.

I won’t spend much time discussing health care as a “right”. It’s not. If a right requires somebody to actively do something for you, it’s not a right. It can’t be. The logical conclusion of requiring somebody to provide you care gets to be a intellectual exercise to be completed elsewhere. That, too, is political.

What I will discuss are the components of a health insurance plan is the U.S. and what to watch out for when planning your insurance coverage.

Premium

This is the amount you pay for your health insurance. For people with employer-sponsored insurance, this is usually paid out of each paycheck, deducted pre-tax. For those with an individual plan, it’s almost always a monthly payment. There generally isn’t much you can do to lower this much. Most employers offer, at most, 2-3 options, ranging from a good plan for a high premium to “we’ll mail you leeches if we think you’re dying” for a much smaller price.

Copay

This is a flat fee paid out of pocket when you get medical care. Depending on your plan and the type of visit, this could be $10-50 or higher. For example, with a plan I participated in recently, the copay was $15 for an office visit, $25 for urgent care, and $100 for an emergency room visit. The office visit and urgent care visit were billed the same amount to the insurance company, so the price difference was entirely arbitrary. Currently, all health insurance plans are required to pay preventative care visits at 100%, meaning there is no copay.

Coinsurance

This is the payment split between the insurance company and the insured. 80/20 is a common split for plans with coinsurance. That means the insurance company will pay just 80% of the bill, until the insured has paid the entire out-of-pocket maximum. After that, the coverage is 100%.

Deductible

This is the amount that an insurance company won’t pay. It has to be covered by the insured before the insurance company does anything. For example, if you have an insurance plan with a $25 copay, 80/20 coinsurance and a $100 deductible, and paying for an office visit costing $600 would look something like this: $25 for the copay, followed by $75 to max out the copay, leaving $500 to be split 80/20 or $400 paid by the insurance company and $100 paid by the insured. That office visit would cost $200 out-of-pocket. The next identical visit would be cheaper because the deductible is annual and doesn’t get paid per incident. That one would cost $115 out of pocket.

HSA

Health Savings Account. For people with a high-deductible plan–that is, a plan with a deductible of at least $1200 in 2011–they are eligible to open an HSA. This is a savings account dedicated to paying medical expenses, excluding OTC medication. It can be used for vision, dental, or medical care. Payroll contributions are taken pre-tax, which makes it a more affordable way to afford major medical expenses. Unfortunately, there are annual contribution limits. Currently $3050 for an individual account and $6150 for a family account. HSAs do not expire, so you can contribute now, and save the money for medical expenses after retirement.

FSA

Flexible Spending Account. This is similar to an HSA, but the contributed funds evaporate at the end of the year. It’s “use it or you’re screwed” plan.

Individual Plans

If you’re not getting health insurance through your employer or another group, you are on an individual plan. These cost more because they A) don’t benefit from the economy of scale presented by getting 50 or 100 or 1000 people on the same plan, and B) you don’t have an employer subsidizing your premium.

Employer-Sponsored Plans

If your employer provides health insurance, you have an employer-sponsored plan. Possibly the fastest way to correct problems with the health insurance industry would be to make individual plan premiums tax-deductible, while eliminating that deduction for employers and letting insurance companies work across state lines. That would eliminate the mutated pseudo-market we have right now, and force the insurance companies to compete for your business. Honest competition is the most sure way to increase efficiency and service while reducing costs. It beats “one payer” or “socialized” care which add overhead to the process and hide the premiums in increased taxes.

Open Enrollment

Most employer-sponsored plans only allow you to make changes at a specific time of the year, unless you have a “life changing event”, like marriage, divorce, death, or children.

Explanation of Benefits

After you use your health insurance, the company will send an EOB, showing you what was billed, what they paid, and what you’ll be responsible for. It’s fascinating to see the difference between what gets billed by the doctor and what the insurance company is willing to pay, by contract. You should read this, to at least understand what you are consuming and how much is getting paid for you.

Maximum Dollar Limit

If your insured care cost more than your maximum dollar limit, or maximum annual limit, the insurance company stops paying. this was supposed to be going away under the Patient Protection and Affordable Care ~~Fraud~~ Act. Unfortunately, if an insurance company offers a crap plan, they have been allowed to apply for waivers based on the fact that they offer a crap plan. The deciding factor in whether the waiver is granted seems to be the amount of the political contributions the insurance company has made to the correct political entities, but maybe I’m just bitter.

Out-Of-Pocket Maximum

This is the most you will have to pay directly with coinsurance. After you pay this amount, the insurance company will cover 100% of expenses, subject to the maximum limit.

COBRA

The Consolidated Omnibus Budget Reconciliation Act of 1985 is, in short, an opportunity to continue your employer-sponsored health plan–minus the subsidy–after you have left the employer. It’s expensive, but it keeps you covered, and will eliminate issue with pre-existing conditions when you get a new plan.

Catastrophic Health Insurance

This is an extremely-high-deductible plan, typically $10,000 or more. For the people who can’t afford coverage, this is insurance-treated-as-insurance. It’s coverage when you absolutely need it, not when you feel a bit ill. $10,000 isn’t a bankruptcy-level bill, while $100,000 usually is. This plan prevent medical bankruptcy for a small monthly fee. For the people who got screwed by a PPAACFA waiver, it bridges the gap between a plan that’s useful for minor things and protection when something goes really wrong.

Things to Watch Out For When Applying For Health Insurance

Now that we’ve looked at the terms you need to understand, we’re going to talk about some things to check before deciding what coverage is right for you.

Individual, Individual + 1, Individual + Family

Do you need coverage for yourself, or yourself and your family? If you and your spouse are both working, make sure to run the math for every possible combination that will cover everyone. Is it cheaper to have one of you cover yourself and the kids, while the other just gets an individual plan?

Maximum annual coverage

It’s really easy to blow through a $3000 annual maximum. If you’ve got a low annual max, look into a supplemental catastrophic plan.

Primary and Secondary Coverage

For years, my wife paid for insurance that covered herself and the kids, while I covered myself. When we were expecting brat #3, I added her to my insurance plan, without having her cancel hers. When the bill came, my insurance plan covered the coinsurance and deductible, which saved us thousands of dollars when the baby was born.

Pre-Existing Conditions

If you’ve got a pre-existing condition, it can be difficult to get insurance if you don’t already have coverage. This makes sense. It prevents someone from corrupting the idea of insurance by waiting until something goes really wrong before getting a plan. Without this, all of the insurance companies would be bankrupt in a year. This is one of the biggest benefits of COBRA. It’s a short-term bridge plan that eliminates the idea of a pre-exisiting condition deadbeat. If you’ve got insurance, you can transfer to a different plan. If you don’t, you can’t.

Homework

Your homework today is to get a copy of the details of your health insurance and look up all of the above terms and situations. How well are you covered? Did anything surprise you?

Living the High Life

Finance, Life

This post is part of the Yakezie Blog swap. I have swapped this week with Eric at Narrow Bridge Finance. This is a post from Eric discussing the theme: What Motivates You to be Financially Responsible? Please take a moment to read my post, Monsters, at Eric’s site.

Unlike my blogger buddy Jason here at LiveRealNow, I have no family. Quite the opposite in fact, I am loving the single guy life. I don’t have much debt. I love going to the bars and partying on the weekends. I have a good job. I have relatively low expenses. Things are good.

So what is my motivation to be financially responsible? It is two-fold. First, I want to be able to keep doing whatever I want whenever I want without worrying about money. Second, I do want to settle down someday in the not too distant future and make sure I have a good foundation to start the next chapter of my life.

I Want to Do Whatever I Want Whenever I Want

Is that selfish? Probably. But who cares? I don’t have kids, I don’t have a wife. I don’t even have a girlfriend at the moment. I do make an effort to donate to local organizations I believe in and I am happy to have friends over for a pre-game and buy a round of drinks, but that is as far as my obligation to others goes.

Doing whatever I want is not always cheap. I like going to concerts. I enjoy nightclubs. I love traveling and exploring new places. $80 tickets, a $15 cover plus drinks, and a $500 trip are fairly common occurrences in my life.

As you know, money doesn’t grow on trees. I have to work hard to pay for the things I want and the experiences I have. I am totally okay with that. But I have to plan now to be able to do what I want later.

I live in a modest and inexpensive apartment. I try to keep my food budget low. I bought a small car that would be reliable, low maintenance, and fuel efficient.

By cutting out wasteful spending and thinking before I spend, I am able to do pretty much whatever I want. If you have the same goal, dive into the depths of your budget. Dig in deep and see where you are spending money. Not to be cliché, but the ‘latte factor’ is a big deal. Those stops at Starbucks, afternoon snacks, energy drinks, cable bills, and other cash drains might not be worth it. If you don’t really, really enjoy it and get pleasure from it, why would you spend money on it?

My Future – Family, Travel, and Early Retirement

I am 26. I am at that point where I am going on a lot of dates. I am meeting a lot of great girls. One of these days, probably when I least expect it, I will fall madly in love and get married. You know the story.

My short term dream is a life of travel and urban living. My long term dream is to get married to a hot Jewish girl (I am Jewish, so it makes sense to “keep it in the tribe”) and have two or three kids. Once kids are in the picture, we move out from the urban fun areas and settle down in the burbs.

But just because I will give up the party life does not mean I have to give up my passions. I want to show my kids the world, give them amazing life experiences, and help them grow to hopefully be even more awesome than me, which is a hard bar to beat.

To do all of that and reach financial freedom, I have to set my goals and work to achieve them. (In case you were wondering, Jason recently wrote a great post on financial goal setting. If you have not read it yet, you really should.)

To get there, I am already working on saving and investing. I am contributing over 10% of my gross income at work to my retirement plans. I am working hard to pay down my student loans and save up a down payment fund. I am planning ahead and saving for my future goals.

How to Reach Your Goals

You probably have financial and life goals too. What are you doing to get there?

We can always tell people about our dreams. However, unlike when you are two years old and dream of being an astronaut police officer that lives in a toy store with an ice cream machine and a McDonald’s in it, your dreams today can be a reality.

With few exceptions, every person can reach their goals. Do you want to retire at 40? Take steps to save and create residual income streams. Do you want to travel in space? Save up to buy a ticket on Virgin Galactic. Do you not have enough money? Diversify your income streams and make more. Do you feel chained down by your traditional desk job that you hate? Start a business and transition to self employment.

Yes, it is easier said than done. But you will never reach your goals unless you take solid steps to get there. Don’t just dream it, live it.

Please take a moment to head over to Eric’s site, Narrow Bridge Finance. While you’re there, be sure to subscribe. You don’t want to miss his posts.

Decision Making Made Easy

Life

Have you ever had to make a difficult decision? Not necessarily a decision that’s difficult because it’s life-changing, but a decision that’s difficult because there are two phenomenally wonderful, yet mutually exclusive options?

For example:

Should you put caramel or strawberry sauce on your ice cream?
Should you go to Disney Land or Disney World?
Should you subscribe to Live Real, Now by email or RSS?
Should you take the job with the stellar benefits package or the higher salary?

These are all real decisions that you may be called on to make.

For most decisions, there are some alternatives that are easy to discard.

MadDog 20/20 isn’t a good alternative to caramel sauce on your ice cream. The local BDSM museum probably isn’t a great choice for a family vacation. Sending me hate mail is obviously worse than subscribing.

Then you’ve got some choices that are both okay, but one is clearly better. You’ve got free airfare and hotel. Do you go to Topeka, or Paris? Neither is horribly, but I think the choice is obvious. You’re going out to dinner. McDonald’s or…nevermind, this fits the first category.

After you’ve discarded the obvious bad choices and the okay-but-not-great choices, how can you decide between what’s left?

This is the point that starts to cause stress. What if you make the wrong choice? What if you regret it forever? What if you’re still not happy? Gridlock.

The reason your stuck is because it’s not apparent which is the better choice. All of your experiences and knowledge are telling you–on some level–that the options are identical in terms of your life, happiness, and goals. It truly does not matter which one you choose. You will probably be equally happy, either way.

Given that it doesn’t matter, you have two choices for making the final decision:

Pick the one you want. The rational decision is a tie, so make it an emotional one. Does one job match your dreams, but with a bit more risk? Has one vacation destination been a goal since you were little? Do it!
Flip a coin. If the decision doesn’t matter, leave it to fate. That way, if it doesn’t work out, you can always blame the quarter.

The one thing you don’t want to do is wait. Failing to decide is still a decision and one that is guaranteed to keep you from being satisfied with your choice. Don’t wait until you have all of the possible information, because that kind of perfect world doesn’t exist. Get to about 85% of fully informed and run with it. You’ll usually be happier making a decision–even the wrong one–than sitting back wondering “What if I had done that?”

How do you make hard decisions?

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