Top 10 Health Insurance Considerations

Quality health insurance consistently ranks as the most desired employee benefit. According to the Harvard Business Review, 88 percent of employees ranked employee health insurance as a the top employee benefit consideration. Which makes sense considering that you can’t put a price on a clean bill of health.
Whether covered by an employer, or shopping for health insurance on your own, there are many considerations to have on your radar. No two policies are the same — there are degrees of coverage, varying price, various restrictions, and much more to keep in mind when seeking health insurance.
1. In-network doctors
One of the first things you will want to check is which doctors are in-network. Navigating the bureaucracy of health insurance networks can be frustrating, but it is an important part of saving money on care. If you have a doctor you like, or one that is conveniently near your home, you might want to check that they are in-network before settling on a health insurance policy.
2. Benefits
This is one of the most variable considerations to keep in mind. Each plan will offer different benefits, and with the right amount of legwork you can find one that best caters to your particular health needs. Do you need regular physical therapy? Do you have specific medication needs? Ask yourself these questions to guide your selection process.
3. Policy type
You’ll come to find out that not all health insurance policies deliver the same service — there are many different “types” of health insurance. The most popular types include HMO, PPO, EPO, and POS plans. These all have features that make them unique, but rather than get into the weeds listing all the benefits and drawbacks of each, we offer this simple advice: be sure to comparison shop. Look for a summary of benefits (which can be found on an online marketplace) and weigh your options from there.
4. Prescriptions
For many Americans, the cost of prescriptions is one of the most expensive, non-negotiable elements of health care. Americans paid an estimated $457 billion on prescriptions in 2015, which is comprises over 16 percent of all health care expenditures. And, considering over 60 percent of Americans take medications every day, this should be a primary concern when deciding on a health insurance plan.

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5. I’m healthy so why bother?
Many young people choose to forgo health insurance all together, and endure the tax penalty, because they think they will never use it — this is ill-advised. For one, even healthy people require regular care, whether that means annual physicals, x-rays, etc. Plus, in the event of an emergency, you would be left fronting a costly, potentially six-figure bill which could drain your bank account and tank your credit scores. While the individual mandate was repealed in 2017, individuals are still legally required to have health insurance through 2019. But, legality aside, it’s best to pay for health insurance now to protect yourself from costly emergencies in the future.
6. Out-of-pocket expenses
The cost of health insurance is a balance between out-of-pocket costs vs premiums. Basically, low out-of-pocket with result in high premiums and vice versa. This is a good time to evaluate your overall health and determine whether you need a lot of medical services or not. For example, if you’re relatively healthy, it might be worth taking on a high deductible in order to benefit from low monthly premiums.
7. Support options
Let’s face it: the healthcare system is confusing. But, thankfully, many insurance plans offer a variety of customer support options to help bridge the knowledge gap for the everyday policyholder. Whether this is a 24/7 support line, or something more intuitive like telemedicine or a mobile app, be on the lookout for policies that offer the support features you need.
8. Chronic diseases
If you suffer from a chronic disease, your health insurance shopping process will be a little different. Usually people are willing to take on large deductibles in favor of low premiums, but if you expect many doctor visits in a year, you might want to approach your shopping a little differently. If you have any reason to visit the doctor often — whether that’s diabetes, cancer, or any number of maladies — search for the lowest deductible possible to keep your medical bills within reason.
9. Filling gaps
Despite how plans are advertised, there is no such thing as a comprehensive health insurance policy. Inevitably, there will be some gaps that might need to be filled. Whether you have many prescriptions, chiropractic care, massage therapy or any other, less common medical needs, you can expect to pay out-of-pocket or seek out a supplemental plan to cover costs.
10. Family coverage
Last, but certainly not least, one of the most important considerations when picking a health plan will be your family. All of the above considerations are at play, and compounded, with each family member. Plus, you will need to find a plan that accommodates all members of the family. When multiple family members factor into your health insurance decision it will be a balancing act, so plan accordingly.
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Savings Hacks You Need to Try This Week

Money Saving Hacks That Work

“Hello, my name is Todd Christensen, and, although this is a bit embarrassing, I must admit that I am a…, well, the truth is, I, uh. Hmpf, Okay, so I will just say it. I am a savings raider. Whenever I see a balance building in my savings account, I am sorely tempted (and sometimes more than just tempted) to either go out and buy something fun with that money, use it for a trip, or just transfer it back to my checking account to cover regular bills and impulse purchases.

Yup, ‘Savings raider.’ That’s me.

“Whew! It feels good to get that off my chest… again.”

Over the years, teaching personal finance and developing curricula on topics ranging from budgeting to rebuilding credit, from paying down debts to building savings, I have learned a thing or two (or five in the case of today’s topic) about tricking myself into developing better financial behaviors. Knowing what I should be doing with my money is one thing. Actually doing it? That is something altogether different while being simultaneously more difficult and more beneficial.

Thus, when I write about savings hacks, I really am referring to simple ways to trick myself by making it more difficult for me to access my savings for trivial expenses or unplanned purchases. These tricks can truly turn your own good intentions (which pave the road to bankruptcy) into good, long-term financial behaviors.

Let’s get started, in my suggested chronological order:

1. Make it INCONVENIENT

Set up your savings accounts in a financial institution that is separate from your checking account or where your debit card account is held. Do not skip this step. The ease with which we can move money back and forth between our checking and savings accounts with a simple swipe or tap on our phone screen means that we are virtually guaranteed to play the transfer game every month.

If you are a savings raider, you know what the transfer game is. You transfer money from your checking account to your savings account and promptly pat yourself on the back. “Hey, good job for saving money.” Then, five or ten days later, after you have rushed through all of your checking account money, remembering in the back of your mind the whole time that you have a spending cushion in your savings fund, you transfer the money back from your savings to your checking. This is not saving. This is simply deferred spending.

Instead, open a savings account at a separate bank or credit union, and do NOT connect them electronically. You want to do everything you can to make it inconvenient to access your savings fund. You might even consider using an online savings account, since, in a true emergency, you can generally still access your money within 2 to 5 days. Personally, I found a credit union that only has one branch in the valley. I will never request an ATM or debit card connected to that account. It does not have a drive-through lane nor is it open after 5:00 pm or on weekends. If I want my money from that savings account, I have to drive there during normal business hours, which means it is too inconvenient for me to raid my savings account.

2. Make it SPECIFIC

Set up a separate savings account for each of your major savings goals. Contrary to common perceptions, it is possible to have more than one savings account, even at the same institution. “But why would you want more than one?” you ask.

Consider this scenario: you have set savings goals that include paying for Christmas gifts in cash and going on a summer vacation. You started saving aggressively in January, so by May, you have several hundred dollars in savings. Summer is approaching, and so you ask yourself the question, “How much of the savings fund is for summer vacation and how much is for buying Christmas presents?” The answer is simple. Human nature says we want the biggest summer vacation now, so we justify taking all of it for a weeklong trip to the coast, soothing our inner money nerd by saying, “we’ll get caught up on Christmas savings later.” Yeah, right!

If you have opened separate savings accounts for each of your goals, you will know exactly how much money you have available to you, allowing you to stay on task and limit your overspending on the here and now. Your goals might include saving for gift giving, a vacation, your next car, medical or transportation emergencies, your next phone or computer, and back-to-school clothing. Only your priorities and imagination will limit your savings goals.

3. Make it AUTOMATIC

Set up a direct deposit contribution from your paycheck to go into your savings account(s). Most American households already have their paychecks delivered directly to their checking accounts, so why not have your savings fund automatically deposited as well. Not all employers can, but most will allow their employees to set up two or even three direct deposits per paycheck. In combination with trick #1, this will prevent your savings fund from ever being in jeopardy of becoming too accessible for spending on impulse.

If your company only permits one direct deposit per paycheck, have no fear. Most banks and credit unions allow you to set up automatic transfers and payments inside and outside their institution. To transfer to a separate institution, you will need the other bank’s or credit union’s routing number and your account number. Then, set up the transfer to happen automatically a day or two after your planned payday.

Setting up separate accounts is one saving hack that will help achieve your financial goals.

4. Make it PERSONAL

Give a name to each of your savings accounts by editing the account details online. Most banks and credit unions will allow you to give your accounts a nickname online or on your phone. So, instead of contributing money to your “Summer Vacation” account (a little vague), you will be depositing money to your account named, “Oregon Beach House Vacation,” or to “Mickey and Minnie’s Magic Vacation with Abigail.” You will consequently be much less likely to raid your savings. If you can give a descriptive name that evokes a powerful emotional response, that account will become much more secure from your potential invasions.

Similarly, do not name an account, “Next vehicle” account. Give it the name of the type of car you really want, whether it is a “2018 238-mile electric range Chevy Bolt” or a “1966 Oldsmobile Toronado muscle project.” Find a name that stirs your soul for each account. You might even name your emergency account something like, “Less stress” or “Better sleep.”

5. Make yourself ACCOUNTABLE

Finally, make sure you share your savings goals with a trusted friend. There are plenty of Facebook posts and entire blogs devoted to the writer’s efforts to reach a savings or other financial goal. That may work for those who are outgoing on social media, but most of us need to put a human face to our friends. Choosing the right friend is critical, though. Consider which of your friends is most likely to hold you to your commitment. “Firm” and “supportive” are the two most important adjectives for the friend you want in this role. Once you choose this friend, share with him or her your savings goals (purposes, amounts, and timelines) and ask them to follow up with you regularly and to ask you about your progress… just do not hide from your friend if you get off track. Stay in contact and stay friends.

There you have them: the five hacks you can put into place this week that will significantly increase your chances of success in saving money rather than just spending it. If you have not noticed by now, with not a single hack involving a dollar sign, successful savings is much more of an attitude and a commitment than an amount… although 10% to 15% is a great goal to shoot for too. But we’ll save that discussion for another day.

Happy money hacking!

 

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Invitation!

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The Perfect Gift for Your Mother

Make your gift memorable using an idea from this nontraditional Mother's Day gift guide

A Mother’s Day Gift Guide with Meaning

Mothers are pretty awesome. At very least, they carried us for nine months enduring a spectrum of unpleasant symptoms and managed to make it to the finish line: our birth. Their labor didn’t end there though but lasted another 18 years of coaching us into the adults we are today.

If you’ve parented into toddlerhood, you probably have a new appreciation for your mother’s patience and persistent love. Really, how many times can someone sanely scrub toothpaste out of the carpet? And yet your mother did and probably snuggled you forgivingly only moments later.

This is why Mother’s day is such a big deal. It’s the opportunity to try as best as we can to repay our mothers for things we truly never can. They spent how many days trying to do right by us for how many years and in return, they get one day a year of appreciation – that’s a pretty uneven tradeoff. Thankfully, our mothers didn’t put in the work thinking it’d be well worth it every time mother’s day rolls around.

Still, we can make an effort to make this particular day special. This might take analyzing what special means. It certainly doesn’t have to mean expensive or popular.

I have a hard time browsing trendy gift guides without rolling my eyes a time or two. Does my mom really care for another kitchen towel or bedazzled wine cork or the ever-contemporary succulent? I actually find the whole idea that a complete stranger might suggest what would be perfect for MY mom to be rather odd. They don’t know her like I do.

So, I am sorry if I am disappointing you, but this blog wasn’t meant to be your traditional mother’s day gift guide. I’m not going to tell you to go buy a cashmere sweater. That’s a default gift. No, instead I wanted to make suggestions that might inspire the right fit for YOUR mother. You know her best and if you are looking to know her better, well that’s just your first insight into what you could give her this mother’s day.

So…

What do mothers really want (that’s affordable)?

Something Exciting

A day in the life of a mother can be a blur of monotony- and it’s tiring. So, while I’m sure she often craves to try something new, she rarely bothers with following through. This mother’s day, create the opportunity and provide the motivation.

My mother still talks about the time my “crazy” aunt called her from the driveway and “kidnapped” her for a pre-cruise tanning session. She had never been to a tanning salon before. So while a tan seems so basic (and inexpensive with a Groupon), for my mother it was unexpected and different which equated to thrilling!
Start with something new, add some surprise, and go along for the adventure and you’ll have the makings for a memorable gift.

Something Inspiring

Seven years into motherhood myself, I’ve come to understand that who I am as a person exists somewhat separately from the part I play as “Mommy”. I’m sure every mother shares some truth in that realization as well as recognizes the very real need to nourish that person we once were.

If you want to inspire your mother, figure out where her passion lies. If nothing makes her happier than her family, maybe collecting photos for a gallery wall would be a meaningful gift for her. Perhaps she’s spiritual and would appreciate a book or piece of home décor that uplifts her. Maybe she admires art and wouldn’t mind visiting the newest exhibit at the museum.

Whatever the specifics may be, give an inspiring gift and the effects will last far beyond the small price ($30 or less) you pay for it.

Something Quality

Painting your mother's nails is one affordable gift idea for Mother's Day.When I say quality, I’m not talking about designer brands. I’m talking about time. As families grow, children tend to move away from the nest. Even when they remain in town, mothers see their children far less.

If it’s been awhile since you’ve had a good heart to heart with your mother, surprise her by scheduling a time to do so. Plan an activity such as a craft or prepare a meal for two.

There may be a particular service you use to provide to her as a child that helped the two of you bond such as painting her nails or doing her hair. It may seem strange to do these things now, but the little things are what mothers miss the most!

Something Relaxing

As a young mother in the midst of a hectic life, I often look forward to calmer days when my children are older (ha-ha). However, the teenage and adult years of children can be the most stressful of all. What your mother may need most is some time to de-stress. This can come in many forms, none of which need to carry a big price tag. Deals can often be found for manicures, massages, facials, and wine tasting.

My own mother is very caring and because of this has struggled with constant worry. Last mother’s day I realized the best gift I could give her was time to herself and the tools necessary to cope with what at times was overwhelming anxiety. The solution was an affordable package of yoga lessons. The techniques taught in yoga have helped her to calm her mind and fight back against anxiousness. It’s a gift that keeps on giving.

Something Familiar

Few mothers can balance their household responsibilities and maintain hobbies. There just aren’t enough minutes in the day! If you are still searching for the right gift perhaps it should entail reigniting your mother’s hobby. Ideas might include:

  • Building a blog she can use as a writing outlet
  • Setting up an art or culinary class
  • Buying some supplies and creating a space in her home for crafting
  • Getting a gardening starter kit
  • Creating an online selling or social media account to launch a business she’s been considering
  • Gifting an e-reader or gift card for purchasing e-books
  • Filling a basket with travel inspo – think books, magazines, maps, current deals, and exotic foods.

Something Thoughtful

As overdone as it sounds, a letter is a cherished gift. When was the last time you expressed appreciation to your mother? Your letter could detail the traits you admire about her or include a fond memory that illustrates you noticed even her smallest sacrifices.

To go along with or in place of a letter, you could add something small that reminds her of you. It could be a card that captures your spirit or a framed photo of a time you shared together. If you haven’t taken a picture together recently, this could be the perfect occasion to gift a mini portrait session. You can politely invite your father and local siblings. In the end, your mother will have something that fills her heart with joy each time she looks at it.

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Relationships and Money

Is Money Causing Relationship Problems?

We would all have a difficult time finding someone who hasn’t been affected by divorce, either their own or a family member. During the hundreds of classes my fellow financial educators and I do each year, we often hear from individuals who have been struggling with excessive consumer debt or even bankruptcy that can be traced to the actions or inactions of their ex-spouse (or soon-to-be ex-spouse).

Too often, however, money and the stresses related to it are blamed for insurmountable marital problems and challenges. Some of our students share how they argue regularly about money and debt, which ends in anger, frustration, and possibly even the splitting up of their family.

Unfortunately, money and its household management (or lack thereof) can be used as scapegoats for other, more pertinent issues in our relationships.

While I am not a family counselor, I do know that money, in and of itself, is just a financial tool or means of exchange. Without the trust that someone else will accept it for the same value we ourselves place on it, money would simply be a piece of paper (actually, it’s mostly cotton) or an insignificant chunk of metal. And it’s that trust that imbues money with extraordinary worth. It is only when money is used as a means of control or power or security that it becomes divisive.

The views about money that we develop in our formative years generally follow us into our relationships. Dealing with our own one-on-one relationship with money can be very beneficial to our family relationships.

We must learn to see money simply as a tool to achieve meaningful goals, rather than something to flaunt, to fear, to envy, or to covet.

To determine the stability and soundness of your own relationship with money, answer the following questions as honestly as possible.

  • Do I feel that having more money would make others respect me more?
  • Do I ever think that just having more money would solve my financial problems?
  • Do I constantly worry that I don’t have enough money to take care of my financial needs?
  • Do I wish I could live the “millionaire” lifestyle, with mansions, fancy cars, parties, world travel, etc.?
  • Do I believe that the rich are “too rich” and should share more of their wealth with people like me?
  • If I’ve ever received a substantial windfall (e.g. lottery, inheritance, or even a big tax return), was it spent within a month or two?

If you answered yes to any of these questions, might I suggest you to take some time to get to know your own finances better? Perhaps as you grew up, there was constant financial insecurity because a parent was a spendthrift? Maybe you were never trusted with money and still haven’t allowed yourself the confidence required to make a few financial mistakes and learn from them?

Whatever the case, it is likely that you have some work to do. We all do. There is no such thing as a perfect money manager. Financial success is not a destination. If we can just accept that financial success is working on a daily, weekly and monthly basis with our income and expenses in order to reach goals that are truly important to us, we’d all find greater satisfaction in our various relationships.

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“Leveling” our Expenses

The key to successful budgeting could be making your expenses as predictable as possible by switching to level pay.

Make Your Expenses Predictable

I regularly teach in my Budgeting (“Spending Plan”) classes that our goal should be to turn as many of our Variable and Periodic expenses into Fixed (or “level”) expenses as possible.

A Fixed expense is one that occurs every single month at the same cost. Examples are rent or mortgage, car payments, 401(k) contributions, monthly bus passes and daycare center bills.

A Variable expense occurs every month also, but the amount varies. Electricity, heating, gasoline, and groceries are among the most common variable expenses in our household budgets.

A Periodic expense, obviously, occurs less than monthly, irregularly or just once in a lifetime. Typical of this type of expense are medical-related charges, vacations, car or home repair, taxes, and most insurance premiums.

Because we are so used to our Fixed expenses, we typically do not spend that money. We know, subconsciously even, that we have to set a certain amount of money aside for our rent/mortgage or our car payment. Ideally, if we could turn all of our expenses into Fixed expenses, we would be better able to manage our money.

Here are a couple of easy ways to convert a Variable and a Periodic expense into Fixed expenses:

  1. Utilities: Most electricity and gas utility companies offer their customers the option of making the same payment every month. They simply average monthly payment for the past twelve months. Some customers have tried to tell me that this is a more expensive option, but that is a myth.
  2. Insurance Premiums: Most insurance premiums are designed to be billed every 6 or 12 months. However, most may now be paid on a monthly basis. Be aware, though, that there is often a $1 to $5 monthly processing fee accompanying the monthly payment option.

Wouldn’t it be nice if our local grocery store or gas station would allow us to be on level pay at their establishment? Alas, I have not heard of such opportunities yet. Instead, it is up to us individually to put ourselves on level pay. This is called, of course, budgeting. We set aside a specific amount each month for our regular expenses.

Pay yourself regularly in order to be financially prepared for replacing appliances when they dieIt is up to us, as well, to look ahead and plan for periodic expenses. Your fridge may be working now, but if it’s already 12 years old, you probably ought to begin saving for your next one soon (“This Old House” has a nice list of average life expectancies of household appliances: click here). If you think it might cost you $1,100 to replace it, divide the expected expense by the number of months you probably have before it needs to be replaced, and you’ll find out what your Appliance Replacement level pay to yourself should be:  $1,100 ÷ 24 months = $46 we should be putting into our savings each month for our next fridge.

We should be doing the same calculations for our furniture (think couches, beds, tables, etc.), appliances, vehicle(s), etc…

In this way, we are “leveling” our Fixed, Variable, AND Periodic expenses so that we’re able to pay for supposedly “unexpected” expenses in cash, by check, or using our debit card, thus avoiding the additional expense of paying interest to store creditors and credit card companies.

Please feel free to share how you’ve converted some of your own Variable and Periodic expenses into Fixed expenses.

Best wishes for continued improvement in your own personal finances!

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