Why Health Insurance is Vital

I know this is a very hot political topic right now, but I'm not here to talk about reform or how expensive health insurance is.  I'm talking about this because this is a vital part of having a solid financial foundation.  As I mentioned in my tip of the week, medical debt is the number one reason why people declare personal bankruptcy.  This is totally a preventable reason if you are prepared with an emergency fund and of course have health insurance.  Now I know some of you are thinking, I can't afford health insurance or I don't qualify for it.  These are probably the top 2 reasons why people don't have it to begin with.


First up, "I can't afford it".  Frankly, this is one thing that you can't afford not to have.  There is a certain number of you who may have coverage offered at work but you don't make enough to afford it.  I'm talking about the family who is below the poverty level.  If this is the case, you probably qualify for Medicaid.  I am not endorsing using Medicaid permanently as a means of life, merely as a stepping stone until you can improve your education, get a better paying job or find other ways to increase your income.  Another common problem is if you lose your job or are self-employed.  Paying for COBRA insurance through your previous employer is probably not feasible since you don't have an income.  These plans are usually out of reach for most.  You're better off to buy a private insurance plan. Find an agent who can shop around different types of policies for you.  There are many options to choose from.  Higher deductible plans might not be ideal for you permanently but they can be customized with office visit coverage and are much cheaper than other more traditional plans.  Use this where possible when you are between jobs or between college and a career.  This is where HSAs are very convenient to have, like I talked about last week.  I'd rather have you be looking at $5,000 or $10,000 worth of medical expenses with a high deductible plan than tens or hundreds of thousands because you didn't have any coverage.


The other main reason why people don't have insurance is because they have really expensive coverage at work, but don't qualify for a private policy.  Many chronic medical conditions as well as most mental health conditions are deemed uncoverable by individual plans.  I know this because my husband has been denied individual health coverage.  For these reasons, most if not all states have a group pool health insurance plan that you can buy into.  The rates are more expensive, but it is a great alternative for those who otherwise would not be covered.


I decided to write about health insurance this week because of a story I saw on the news recently.  A young married woman was standing on the side walk waiting for the bus to start her final semester of college.  An impaired driver jumped the curb and plowed into where she was standing, completely destroying her knee.  She was a dance major and loved teaching ballet.  If this weren't bad enough, sadly, her husband just graduated from college a few weeks ago and they were no longer covered by health insurance.  This poor couple will be impacted for years to come, not only physically and emotionally, but financially.  Things like this happen everyday.  Please take the necessary steps to prevent and prepare for such things.  It's really that important.

Tip & Quotes of the Week August 20-27

Emergency Fund

I've said it before and I know I'll say it again. Everyone, no matter how old or young you are, no matter how much you make; needs an emergency fund. You'd be surprised at how many don't have even just $1000 in reserves. But sadly considering 7 out of 10 of you are living paycheck to paycheck, I guess it's not too surprising.

Homework:

If you do have an emergency fund, that's great! However, if you don't, make it a priority to get one ASAP. Life is a dangerous ride and if you don't have a cushion you are bound to get hurt. Take action today!

"There is treasure to be desired and oil in the dwelling of the wise; but a foolish man spendeth it up." Proverbs 21:20

"Anything that we can do to raise personal savings is very much in the interest of this country." Alan Greenspan

"An emergency fund turns a crisis into an inconvenience." Dave Ramsey

The Importance of Emergency Savings

I know you have all been patiently waiting for me to get back on top of things and blog again.  I just was busy last week and didn't get around to it.  Anyway, last month we had quite the experience that illustrates a few major points in personal finance.  First, you must live below your means.  If your expenses meet or even exceed your income, you are building a house of straw.  When the first big wolf (aka life) comes along, he'll blow you down.  Second, this experience shows the importance of having and maintaining an emergency savings.  Remember it's not if, it's a matter of when one will happen. 

It all started last month with the great HSA debacle.  I haven't talked about HSAs.  In case you don't know, it stands for Health Savings Account.  I will talk about the benefits of these in the future, but basically they allow you to save for and pay for medical expenses with pre-tax dollars.  We have one through my husband's work.  Without realizing it, we over-funded it for the year and so when his HR manager went to add our contribution, it wouldn't let her do it because of the tax implications.  We are talking about a few hundred dollars.  The paycheck had already been cut so she couldn't just add it back in.  We had to wait until the next pay period to get the missing money.  Normally this would have been nothing more than an annoyance, but that pay period we needed to order my husband's medication.  He has a chronic condition and the medication is very expensive, almost $800 for a three month supply, until we meet our deductible.  Without that money in the HSA there wasn't enough to cover the full cost.  We ended up pulling money out of our savings account to cover the cost and waited to get a partial reimbursement from the HSA and get the rest of the money in the next paycheck.


When this happened, the first thing I thought of was, what would we have done if we didn't have that money set aside?  This would have been a true crisis!  I mean, he couldn't just not have his medication for a few weeks.  I guess this would have been a situation where someone without savings would have put it on a credit card and added to their debt load.  


To finish the story, a few weeks later we got an extra big paycheck and were able to put the money back into savings.  However, last pay period things went wonky again when an error was made because the automatic HSA contribution wasn't changed.  Yet again, we found ourselves shorted a few hundred dollars.  This time we only had to wait a week to get the extra money, but it was still annoying.  Again I thought, what if we weren't in a position to handle this shortage?  So please take a lesson from my story.  Ask yourself what you would do in this situation?  If being shorted a few hundred dollars temporarily completely rocks your world, please make some changes today.  If you don't know where to begin, I'd be happy to help.  This is what I live for!

Tip & Quotes of the Week August 6-20

Fear

Living in fear is one of the worst ways to live. Not only does it affect your mental health, but the worry eats up your physical health. It robs your life of joy. The stress and worry over finances can only be relieved if you are willing to face those fears. Like ripping off a band-aid, yes it's painful, but in the end it's better than letting the wound fester.

Homework:

Don't let fear overtake your life, get the help you need today. I promise the pain of change is nothing compared to pain of fear in your life. If you or someone you know are experiencing this, I'm here to help!

(These are some of my favorites)

"Change is very hard and we change only when the pain of [staying the] same is greater than the pain of change." Dave Ramsey, More Than Enough

"Whether you think you can, or you think you can't, you're absolutely right." Henry Ford

"Insanity: doing the same thing over and over again and expecting different results." Albert Einstein

Keep going!

Hey there! I just wanted to drop a quick word of encouragement to you in the trenches.  I know this is tough stuff you are dealing with.  I've dealt with it and am still dealing with it.  Life will always be there trying to derail your efforts.  The thing you have to remember is that small things make big things happen.  The little daily things you do with your money make a huge difference over the course of a month or year.  Adding all those little things together over time, you will see a difference.  So keep your chin up and keep going! You will only get where you are going if you keep at it!

The Emotions of Money

Why is money so hard to manage?  I mean we're talking about sixth grade math.  I have come to the realization that it's hard because it's not just about the numbers.  It's all the emotions swirling around earning and spending money that make it so difficult to deal with.  This is the ugly side of money.  Today I want to talk specifically about fear.  This is the #1 emotion that I run into as a financial counselor.  Getting people to face their fear and denial is the most challenging and frustrating part of my job because I can't help them if they are paralyzed with it and in denial about their situation.


One of my financial counselor associates hit the nail on the head when he mentioned to me that every one needs a dentist, yet everyone doesn't go to the dentist.   Even when you're in pain, the fear of going to the dentist will keep some people from going anyway.  He likened what we do to being like a dentist, only for your wallet.  Some may need a check-up and others may need a root canal.  As a side note,  I hope Aaron doesn't mind that I borrowed his idea, because I thought it was brilliant.  If you are in the Kansas City area, please check him out, True North Financial Fitness Coaching.  Fear of what may or may not be needed, keeps some from trying in the first place.  Fear of actually facing the elephant in the room and fear of the ability to change things are completely normal when it comes to financial problems.  I firmly believe that if you've got the will, I've got the way for you to get help.  It's only too late if you think it is, because restoring hope is what I specialize in.
  
My point is that there are many emotions surrounding money.  From an early age our interactions with money will affect how we will use it as adults.  Think about some of your first memories of money.  Chances are, these are the roots of why you handle money the way you do. Fear is a huge stumbling block for a lot of people.  Please don't let it stop you from achieving your goals, especially the financial ones.   

Tip & Quotes of the Week July 30-August 6

To the Newlyweds

Those of you who are engaged or newlyweds are probably seeing your future through rose colored glasses. Not that this is all bad because it's good to be optimistic. But I want you to realize that marriage is much more than an event, it is a process. It is hard work to keep a marriage on the right track because life will try its best to derail even the strongest of marriages.

Homework:

With your spouse or fiancée, read through my 6 tips to a successful marriage. These concepts apply whether you've been married a day or a lifetime.
"Chains do not hold a marriage together. It is threads, hundreds of tiny threads which sew people together through the years."Simone Signoret

"Success in marriage does not come merely through finding the right mate, but through being the right mate." Barnett R Brickner

"A long marriage is two people trying to dance a duet and two solos at the same time." Anne Taylor Fleming