Category Archives for Saving Money & Frugal Living
High Maintenance or Just Kempt – What Percentage of Your Income Should You Spend on Appearances?
The following post is by staff writer, Sally. Sally is the blogger behind TinyApartmentDesign.com, a blog about design, living well, and simple, tiny spaces.
Glancing at a list of my most recent purchases, a pattern quickly emerged: highlights for my hair. Teeth whitening. Mani/pedi at a pricey $36.
Who do I think I am over here, JLo? I’ve been spending money on my appearances lately, and I wondered if that makes me high maintenance. What counts as high maintenance? I propose that there is one key factor that can push you into the high maintenance category from the more basic, “just doing what I gotta do to look good” label.
The High Maintenance Test: Proportion of Income Spent
There’s a rule of thumb that no more than 30% of your gross income should go towards housing.
What’s the rule of thumb on keeping up appearances, which can include hair, skin, nails and teeth upkeep, and luxe clothing, shoes and accessories?
Here are a few thoughts: If you’re spending 5% or less of gross income, you’re well within reason. Spending around 10%? You’re pushing the limit on what your income can reasonably afford, but you’re still making it work. But more than 10% and you might qualify as high maintenance. Let’s look at two examples with two different income levels:
Party A grosses $3k per month or $36k per year.
He’s spending (plug in each of the following numbers) per month on personal maintenance:
5% or $150: Looking good! Keeps his hair trim, maybe a hot towel shave, and sports nice sunglasses and some cologne. Ladies, this guy seems like a keeper and he smells nice.
10% or $300: OK, so he’s managed to keep his other expenses down. Nothing wrong with spending a little more on yourself if that’s what you like. Leans towards designer labels.
15% or $450: I don’t trust this guy. He spends more on his aftershave regimen than I do on a year’s worth of cosmetics. Granted, maybe he looks really good thanks to all this effort and spending, but he could just as easily look kinda cheesy for spending so much.
Now let’s apply the same numbers to a higher-grossing individual.
Party B grosses $10k per month or $120k per year.
5% or $500: This is actually impressive. The higher salary hints that this person might own her own business or spend time in front of clients in a corporate setting. Either way, she may find she wants to spend more on luxury clothing that lasts, like a St. John suit or some classic pumps. Across a year, she spent $6k on othing that lasts, like a St. John suit or some classic pumps. Across a year, if she spent she wants to spend more on lu a good bag, clothes and haircuts.
10% or $1,000: $1k a month on maintenance sounds steep, but Party B can afford it, and decides to spend her money here. Maybe a little to me, but not to her. And she looks put-together.
15% or $1,500: Even with that high income, that’s a lot of money to spend on just appearances. Clients don’t care if your shoes have red bottoms, they just want you to deliver. At $1,500 a month, some of this this spending might include La Mer face cream, porcelain veneers and other spending that pushes Party B solidly into “high maintenance” territory.
When you’re spending on your appearance, it’s easy to feel like it’s all frivolous spending.
But if you’re spending a single digit percentage of your income, and taking care of your looks with haircuts that give you a boost of confidence or a Ferragamo belt you can wear with all kinds of outfits, take comfort in being a stylish kempt person who isn’t high maintenance in the least.
How about you all? How much do you think you spend per month on your appearance? Do you think it’s worth the money?
Share your experiences by commenting below!
***Photo courtesy of http://www.freeimages.com/photo/1385221
Investing in Personal Infrastructure Part 2: Your Finances and Daily Routine
The following post is by MPFJ staff writer, Sally. Sally is the blogger behind TinyApartmentDesign.com, a blog about design, living well, and simple, tiny spaces.
We talk about personal infrastructure as all of the tools and systems that help your life run, although we are also part of the infrastructure of our communities.
So, if you want to do trail runs and bike rides in your neighborhood, but there are no trails or bike lanes, it will be hard to make those activities a part of your daily life. If you want to take public transportation to work or to go somewhere on the weekends, then you’ll need buses, rail or paratransit in the neighborhood. If you want to buy an electric car but there are no charging stations within 20 miles of you and you can’t charge at home, it will be difficult to justify buying an electric car.
In our cities and communities, we are always looking to build systems that work, that people will use and that provide value to the users for years to come. We can also do that in our own lives as well.
One of the first places to analyze your own infrastructure is how you’re spending your time on a daily basis. Here’s an easy personal example:
When I go to work at 8 am, it takes me almost 50 minutes in traffic to get to the office. While I usually try to take advantage of that time and listen to books on tape, I’ve neglected going to the library and haven’t listened to much besides the radio and songs on my iPhone. But when I wake up early to go to the gym, it takes just 20-25 minutes to get to work, which means I can save two hours each week that are not spent in the car. Those two hours are then included in my workout, so it’s a double benefit.
We also spend a lot of time at work, and if you can use your time efficiently, you can make the case (eventually) that you don’t need to be there just for office hours, you need to be there to take care of your work. The next time you are tempted to waste some time before getting to your next task, step away from your work area for a minute or two, visit with a coworker and head into the next job refreshed. Make your work easier to do. If you work in the field, keep all of your tools with you. If you work in an office, you can listen to relaxing music (just Youtube ‘study music’ for good options) in 25 minute chunks while you focus on getting an immediate task.
How does all of this affect your finances? When you are using your time and resources well, your finances will improve. Some of the first things you can implement are:
- Setting up direct deposit for your income
- Setting up automatic savings each week or month
- Setting aside 30 minutes each month to update your net worth
- Reviewing your estimated fixed monthly expenses at least every 6 months to identify places to save: cell phones, internet, even your mortgage or rent
You may already be doing all of these things, but the key is to keep reviewing and looking for improvements. If the system isn’t working, it can always be adjusted.
How about you all? What systems do you have in place that is working best?
Share your experiences by commenting below!
***Photo courtesy of https://www.flickr.com/photos/wwworks/3957311986/in/
Review of 5 Popular Online Photo Storage and Printing Services
The following post is by MPFJ staff writer, Shondell of Call Me What You Want, Even Cheap. She blogs about her recent car loan and mortgage pay off and a whole bunch more. Check out her blog right here.
The invention of the digital camera completely changed the face of photography.
Online photo storage providers have revolutionized the way photos can be stored and shared. There are several good reasons to save and store your photos on online photo storage and printing sites. Perhaps the most important is that storing photos on your computer’s hard drive is a bad idea because hard disks have the habit of crashing at the most inopportune of moments. Other reasons include zero risk of data loss, more quickly and easily accessible, and easier to organize.
There are many photo storage and printing providers with attractive offers and incentives. Here is a comparison of some of the most popular ones.
Snapfish:
Snapfish is a web-based photo storage and printing service owned by Hewlett-Packard. It allows members to upload photos for free and gives unlimited storage space. While most Snapfish features are free, you will be charged per-image fee if you want to download an original or high resolution copy of your own uploaded image. Membership is free of charge.
Members can share individual photos, photo albums, animated snapshows, Group Rooms and other Snapfish products via email, link URL and social media sites like Facebook and MySpace. You will need a Snapfish account to view or share photos.
The minimum rate of Snapfish is $0.09 for a standard sized (4 x 6 inches) photo.
Flickr:
Flickr is a web-based photo and video sharing site created by Ludicorp in 2004 and owned by Yahoo since 2005. Flickr is not just a photo sharing service, it is also an online community used by everyone including bloggers and photo researchers.
Flickr offers three types of membership: Free, Ad Free and Doublr.
- The Free account comes with one terabyte of storage space limited to 200 MB per photo and 1 GB per video.
- The Ad Free account comes with the same storage but free of advertisements for an annual fee.
- The Doublr account comes with twice the storage space of the Free account but a higher annual fee than the Ad Free account. The service offers several innovative ways to upload and share photos.
Picassa:
Picassa is a web-based photo organizer and photo viewer with an integrated photo-sharing website where you can organize, edit and share your digital photos. Created by Lifescape in 2002, it was purchased by Google in 2004.
Picassa allows anyone with a Google account to upload and share up to 1 GB of photos for free. Allowed dimensions for the photos are 2048 x 2048 pixels for Google+ users and 800 x 800 for other users. Images exceeding these dimensions are automatically resized. The service offers several ways to import, track and organize photos, and also offers several basic photo editing functions.
Shutterfly:
Shutterfly is a web-based image publishing service that allows you to build perfect photo books. In 2013, 80 percent of its customers were reported to be women. It allows users to create personalized photo gifts, such as photo books, mugs, bags, stationary cards and blankets.
Shutterfly offers simple ways, called paths, to build photo books, which you can share on Facebook and and also publish them as PDF files on your website. The service charges its users $29.99 per standard photo book.
The minimum rate on Shutterfy is $0.15 for a standard sized (4 x 6 inches) photo and $29.99 for a standard photo book.
SmugMug:
SmugMug is a paid web-based photo sharing and image hosting service that allows its users to upload digital photos and videos. Launched in 2002, the service offers a range of tools to facilitate both amateur and professional photographers to sell their digital and printed photos.
SmugMug offers four types of accounts to its users, each having a different subset of features. Users can charge people for downloading their digital and printed photos and set the prices themselves. It also allows users to sell merchandise.
The minimum rate on SmugMug is $0.19 for a standard sized (4 x 6 inches) photo.
MPix:
MPix is a web-based photo sharing and printing service that allows users to create and order professional quality photos, customized cards, custom wall art and stationeries. Owned by Miller’s Professional Imaging, it is arguably the best photo sharing site there is for professional photographers as well as amateurs.
MPix provides prints in three different types of photo papers: Kodak E-Surface, True B/W and Metallic paper. For those who need, luster coating, mounting, framing, key chains, canvas mount and wall clings are also available.
The minimum rate on MPix is $0.29 for a standard size (4 x 6 inches) photo.
How about you all? What photosharing websites do you use or which is your favorite?
Share your experiences by commenting below!
***Photo by Sam
What Are Your Options For Streaming TV Players?
This is a post by staff writer Jeff. Jeff blogs about finances and going green at http://sustainablelifeblog.com and has started a new project detailing his efforts to earn money online at onlinesideincome.com
If you’re looking for a painless way to save some money, one of the easiest ways is to lower your cable bill or get rid of cable TV entirely.
There’s a whole group of people that are “cutting the cord” now, and saving upwards of $1,000 per year doing it. Personally, I convinced my wife back in 2009 that we needed to stop paying these people a huge sum of money for the privilege of sitting in front of the TV and watching stuff we were not interested in just because inertia set in and we didn’t want to do anything else! We realized it was a huge time suck (because we didn’t want to spend all night in front of the TV after work) and a huge money suck (because it was like $150/month) so we got rid of it.
Instead of cable TV, we use streaming for all of our favorite shows. We stream through services like Hulu (free), Netflix ($7.99/month) and Crackle (free), though there are others. Since we still want the TV feel and we don’t want to invite our friends over and crowd around a tiny computer monitor, we wanted to watch on our TV. Since we wanted to do that, we needed some sort of set top box to connect to the TV.
There used to be just two of these on the market, but Amazon recently entered, so we will go over them all.
Google Chromecast
This is what my wife and I decided to use, as it was the cheapest option at $35. The Chromecast is a little dongle that you plug into the HDMI port on your TV (meaning you cannot use Chromecast if you have an “old” analog TV) and connect it to your wireless network. Once the Chromecast is added to your wireless network, you need to add a plugin to Google chrome browser so you can “cast” the tab to your TV. Some services (like Netflix) have built in casting, but some don’t. Total set up time is about 10 minutes.
It works with the streaming options that we have (Netflix) and it works well. We are easily able to pull up a movie on Netflix and in a matter of seconds; it’s on the TV and is loading. Unfortunately, to use the official Hulu Chromecast app, you need to have Hulu plus – which we do not have. They have recently opened the Chromecast up to developers to create apps, but here’s the current list. If you’re interested, you can buy a Chromecast on Amazon.
Amazon FireTV
This just came out recently, and I don’t have one yet, but from looking over the specs the FireTV looks pretty good.
They have apps from Hulu plus, Netflix, ShowTime and watch ESPN (for those who love sports), and it offers easy access to Amazon’s video and TV streaming library. Access to the video and streaming library is only for prime users, which costs $99 per year (8.25/month). The Amazon FireTV unit itself costs $99. With this and Amazon Prime, you can take your cable costs down from $150 per month ($1,800 per year) to a cost of 200 for the first year, then 99 per year thereafter – that’s a savings of over $1500 per year!
It’s also got a remote that you can speak into to tell it to watch your favorite shows. Early reviews are mixed, but the device has promise, and is probably a great fit if you’ve already got Amazon Prime. If you’re interested in a FireTV, you can buy one on Amazon.
Roku Box
Last up is the Roku box. The Roku box was one of the first streaming boxes (along with the now dead Boxee), and has evolved quite a bit. There’s very easy streaming, and they have tons of channels available. More than the Amazon fireTV and Chromecast. You can listen through the Roku remote, as well as play shows from your phone. Right now, the most current version is the Roku 3, but you can pick up a Roku 2 off of eBay or Amazon, and that will probably still meet your needs for streaming.
You can find the list of Roku Channels here, and as I mentioned, they have a lot more availability than the two devices listed above. This unit does cost more than the Chromecast and the same as the Amazon TV (though they still sell Roku’s 1 & 2 on their website), but has a lot more availability. If you don’t have Amazon Prime (but do have Netflix) perhaps a Roku will be best for you. If you’re interested, you can buy a Roku on Amazon.
Those are the most popular streaming options (and yes, I know most don’t offer much sports coverage).
All that being said, do you think that one of these is good enough for you to finally cut the cord and get rid of cable? Maybe you can use that $1,500 per year on a fancy vacation or investing. If so, let us know what one you’re getting (or already have) in the comments!
***Image courtesy of http://cdn.morguefile.com/imageData/public/files/b/breda/
What You NEED To Know About Your Medical Coverage Before Going On Vacation
The following post is by MPFJ staff writer Travis. Travis is a customer blogger for Care One Debt Relief Services, and also appears weekly at Enemy of Debt. Travis candidly shares his personal journey to pay off $109,000 of credit card debt and the tips he’s learned along the way. As a father and husband he provides a unique perspective on balancing debt, finances, and family.
Admission time, I have generally walked through my adult life without knowing the specifics of what my health care covers and what it does not. I’ve taken on the perspective of, “I’ll figure it out when I need to.” But last month, for the purpose of a post on this website, I explored my current health care plan in a level of detail I’ve never reached before.
Little did I know how soon I would use this information.
Midway through our vacation in Florida, my wife woke up at 1:30am in pain with a rash above her left eye.
The rash had developed a few days prior, but was only a slight annoyance until now. She immediately called our insurance provider’s help line which connected us with medical personal able to answer basic questions. After a few minutes of discussion, she was advised to seek medical attention within 24 hours.
I remembered reading about the differences in coverage between going to the ER, urgent care, and a doctor’s office visit, but I couldn’t recall the specifics. Luckily for me, I bookmarked the web page with my plan’s information so I could quickly recall what each of the options would cost.
- Emergency Room Visit: Subject to my deductible, of which I had not had any expense for yet in 2014. Thus, we would pay the full price.
- Urgent Care: We would pay 15% of the bill.
- Diagnostic Office Visit: 100% covered.
I would never suggest my wife delay care if she felt she needed immediate relief, however after reviewing our options she suggested she would try taking some ibuprofen and wait until morning to decide our next action.
When we woke up, I immediately began searching for nearby medical facilities. I knew that there would be a difference in what we would pay dependent upon whether the facility was in our plan’s network or not, so I again pulled up our plan’s details.
- Emergency Room: Patient responsibility is the same in network vs. out of network.
- Urgent Care: Patient responsibility is the same in network vs. out of network.
- Diagnostic Office Visit: 100% covered in network, subject to deductible if out of network
Using a list of in network providers, I was able to find one within 5 miles of where we were staying. Amazingly we were able to get an appointment almost immediately that morning.
My wife was diagnosed with an infected bug bite. The physician’s assistant who was handling my wife’s appointment prescribed the following treatment plan:
- An antibiotic shot was given in the office
- A prescription was given for a 10 day cycle of antibiotics
- A prescription was given for a steroid to help reduce the symptoms and pain
We passed a Walmart on our way to the appointment, which I knew was in our provider’s pharmacy network. I instructed them to send the prescription there, to minimize the cost of the drugs.
As we were checking out of the facility after the appointment was complete, the woman behind the desk asked if we would be paying that day, or if we would like them to send the bill to our home. Given that we thought the appointment was an in network diagnostic office visit, we had thought the fee would be covered by insurance.
During the phone conversation that followed with our insurance provider, we learned the following:
- It was covered 100% if my wife had been seen by a doctor
- If my wife had been seen by a physician’s assistance or a nurse practitioner, the fee is subject to our deductible because they are considered specialists.
Going back to the reception desk, we were told that she had indeed been seen by a physician’s assistant. However, they submit all bills under the name of the physician on call for just these kinds of situations.
We breathed a sigh of relief, and asked them to submit the bill to our insurance.
When we got back to our vacation rental house, we did a little side by side comparison to determine what the cost of our medical excursion would have been had we made different choices:
In Network Cost
- Diagnostic Office Visit: Because we found an in network provider the cost was zero out of our pocket.
- Prescription Drugs: Because we found an in network pharmacy, the cost was about $8.
Total Cost: $8
Out Of Network Cost
- Diagnostic Office Visit: Subject to deductible, which we have not accumulated any medical bills. We would have paid the full price of the office visit: $150.
- Prescription Drugs: Out of network pharmacy cost would have been about $25.
Total Cost: $175
What I learned
This was the first time I had ever had to seek medical services while far away from home, and it taught me some very valuable lessons for things I need to do each time we go on vacation, or are a significant distance from home:
- Know at least the basics of your medical coverage.
- Know how to access more detailed information just in case you need it.
- Have your insurance card and the phone number to their help line to answer questions about your medical plan if needed.
- Know where the nearest in network provider is for your medical coverage.
- Know where the nearest in network pharmacy is located.
Having this information can mean the difference between a small out of pocket fee, and a significant medical bill should you have a medical condition that requires attention while you are away from home.
How about you all? Have you ever had to seek medical attention while on vacation? Did you make the right choices given your medical coverage?
Share your experiences by commenting below!
Image courtesy of Stuart Miles / FreeDigitalPhotos.net
Life’s Trade-Offs
The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.
We were all children once.
At times, our parents would be brave enough to take us with them to the store and it totally backfired. They tried to keep us away from the toy isles, but when we got a glimpse of one of those “must-have” toys, we began to ask for it repeatedly. We thought of all the reasons why we deserve to have that toy. Perhaps we have been extra good lately, or maybe we would promise to be extremely good in the future. Maybe we could convince mom or dad that this toy was educational and would propel us into a new category of learning. Finally, we tell them that we will forfeit our birthday or Christmas presents for this toy (always a good idea at the time, but doesn’t feel too brilliant when our birthday rolls around…). The bottom line was, we wanted it and simply couldn’t do without it.
From Children to Adults…sort of
Yes, we were all children once, but now we are living in adulthood. We have homes to maintain, bills to pay, and some of us even have children of our own to take care of. Our hairlines are receding and might be getting a little “salty,” but we can all still revert to our childhood selves when the time is right.
Here are a just a few things that bring out the child in us when we see them:
- A new car
- A new boat
- A top of the line golf driver
- A china cabinet
- A new television
- A new purse
- A new dress
Oh boy, when we see these items we know that they are not really needs, but we start devising a reason why it would make sense for us to have them. Perhaps we just got a promotion at work and feel deserving of that executive-looking car. Or, maybe you have stuck to the family budget for an entire month and feel the need for a little bit of a spending spree. After all, your husband did just get that new driver. You deserve it!
That child-like mentality might never leave us, but if we want to be wealthy in the future, we are going to have to learn to suppress those immature feelings. You can’t deny this to be true. Money is finite, which means that life has trade-offs. Every purchase has it’s opportunity costs.
The Mercedes and the Mutual Fund
I recently heard a story that illustrates this concept perfectly:
A salesman decided he was going to work his butt off for a year to hit his income goal of $200k. If he accomplished this, he was going to drive to the Mercedes dealership, hand over his piece of junk car, and buy a brand new $80,000 Mercedes with cash that he saved up from his impressive earnings.
On December 10th, this man hit his earnings goal of $200,000! He was now ready to buy his brand new Mercedes to reward himself for his tireless work. Just like he said he would do, he went to the dealership, pointed at the Mercedes he wanted and simply said, “I want to test-drive that one.”
He took it for a drive and it was everything he thought it would be. The leather seats hugged him close, and the heated steering wheel kept his hands nice and warm during the drive. This car cornered like no car he had ever driven and was falling in love with it. The child inside of him was saying, “This is your car dude. You deserve it. Everyone is going to envy you and you will be the talk of the neighborhood. This is your car.”
He almost handed over the cash, but then the adult in him finally came into the conversation: “$80,000 is a lot of money. You could buy a very dependable used car for much less money, and it will last you for a long time. Think about the opportunity costs. What if you invested this money instead?”
As it turns out, this man did not buy the car. Now, 20 years later. The Mercedes is worth $4,000 and his $80,000 mutual fund has ballooned into $500,000 dollars.
Be sure to listen to the adult in you. What if, instead of buying that item, you invested the money instead? Is this purchase still worth it?
***Photo courtesy of http://www.flickr.com/photos/erin_costa/5941282494/sizes/l/
Identifying And Eliminating The Grey Charges In Your Life
The following is a post by MPFJ staff writer, Toi Williams, who is a professional personal finance blogger of Fine Tuned Finances. She has backgrounds in personal finance, sales, and real estate.
One of the sneakiest financial developments of the past decade has been the proliferation of grey charges added to consumer’s accounts, often without the consumer realizing it.
There are so many companies taking advantage of grey charges that nearly everyone is affected in some way. In many cases, the consumer has been charged these charges for months before they realize it.
Fortunately, you can fight back against grey charges and eliminate them from your life if you identify them and take steps to protect yourself against them.
Identifying Grey Charges
Grey charges are repeated charges made to your bank account or credit card without you authorizing each purchase.
Companies that request the right to deduct money directly from a consumer’s bank account for goods or services fall into this category. Other companies enroll you in a service plan that allows them to charge your debit or credit card on a regular basis without you authorizing each charge. In most of these cases, you cannot access the service or product without first giving the company authorization for automatic charges to your accounts. Some companies use every trick that they can to get onto your credit card statement because they’re banking on the fact that you’re not paying attention during the sign-up process.
Grey charges can be found in magazine subscriptions, online game subscriptions, book or movie club memberships, automatic renewals, and free services that switched to premium paid services without your knowledge. The most notorious source of grey charges is the free trials that require your credit card for the trial. Securing your credit card information in the beginning ensures that the companies can charge a consistent stream of subscription fees at your expense. The trial is what gets you in the door and allows them to charge your credit card bill every month.
Eliminating Grey Charges
It is important to try and reverse or cancel the charges as soon as possible to prevent more money from being siphoned out of your account. Having the charges eliminated can be time consuming and it is very easy to get frustrated with the situation. In fact, getting rid of these charges can be extremely difficult if you are dealing with an unscrupulous company. After all, the company that placed these charges on your account want to keep the charges going for as long as possible so that they can make as much money as they can.
In some cases, the company will throw up unnecessary roadblocks to prevent you from canceling the charges quickly. These roadblocks may include having to travel to a physical location to cancel the service in person, having to send in paperwork or documentation to the company, having to provide a reason for the cancellation or discuss the cancellation with multiple representatives of the company.
The easiest way to avoid these charges is to simply not do business with companies that engage in this practice. Grey charges often happen because consumers aren’t paying attention when making a purchase, so you can combat these charges by being mindful and monitoring your purchases on your credit card and bank account statements on a monthly basis. You should also read the fine print before going through with the transaction and ask questions about anything that you do not understand. If the rep cannot answer the questions or there is no one available to ask, you may want to reconsider your purchase.
My Personal Experience
A few years ago, I decided that I was going to join a local gym to get into better shape. This gym would only grant you a membership if you signed up for the membership plan that deducted the membership amount from your bank account automatically. I had no problem with this while I was going to the gym regularly, but the problems began when I decided to cancel my membership while planning to move across town to a new neighborhood.
There seemed to be no way to cancel my membership. When calling the company to cancel, I was told that I had to speak with a customer service representative in person. Traveling to the location to cancel in person brought a long interview where I was encouraged to make use of their other facilities (too far away to be convenient where I was moving) or put the membership into hiatus (allowing them to continue charging my account a lesser fee for no service at all).
Even after reiterating multiple times to multiple people that I wanted to cancel my membership, I still found that I was being charged the full membership fee months later. I ended up closing the bank account to prevent any more charges from being deducted from the account without my authorization. In response, the company began sending me letters letting me know that they were continuing to charge me and that I now owed them money that I needed to remit immediately, instead of just cancelling my membership. I had to threaten legal action to get the harassment to stop.
My Decision
While not all companies are bad in this way, I have to admit that this one bad experience has ruined it for everyone else. I have never again signed up for an account with any company that required them to make automatic transactions from my bank account for goods or services. I would love to join another gym, but instead I walk around my neighborhood and exercise at home. There are some products that I would love to try, but having clearer skin isn’t worth the headache I might face trying to cancel the service plan.
This is the decision that I have made, but it may not be the right decision for you. Before signing an agreement with any company that wants you to allow them to make automatic charges to your accounts, review your options carefully. You can also go online and perform a search to see if there have been many complaints by people trying to cancel the service or stop the automatic charges from occurring. You may find that the product or service is not worth the trouble after all.
How about you all? Have you had difficulty with grey charges in your life? How did you get the charges to stop?
Share your experiences by commenting below!
***Photo courtesy of http://www.flickr.com/photos/restlessglobetrotter/3378489363/
Managing Money is Like Learning to Ride a Bike
The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.
Do you remember when you were a kid and you were so excited to ride a 2-wheeler?
You were going to hop on and show your dad how talented you were, immediately riding away without his help. This is not how the story actually went though did it? Instead of riding like a veteran, you ran your bike into bushes, stacks of tires, buckets, and perhaps even parked cars in the street.
Beyond this, you may have even fell down when there were absolutely no obstacles. Your visions of perfection were quickly tarnished, and you grew increasingly frustrated at what you thought would be easy.
Some of you may have thrown your bike down and quit (perhaps more than once), storming inside in frustration (and probably crying to your mom). You thought you would never learn to ride that stupid bike, but you eventually did, didn’t you?
The Infamous Budget
Around tax time, many of us begin to wonder where all of our money has gone each year. Those tax documents claim that we have earned $50,000, $70,000, maybe even $100,000, but what do we have to show for it?
A piddly-nothing savings account with $550 in it. What happened? How could we earn so much and keep so little? This is the point where we decide that we are going to grow up and ride that 2-wheeler. In other words, we are going to start tracking our money and make a budget.
Before the new month begins, we write all of our necessary expenses down on a piece of paper and vow to spend no more than that amount during the next month. Let’s say this totals to $2,500.
We Scrape Our Knee and Break Our Arm
The month begins and we are excited. If we can get through the month following our budget, then we will have an extra $800 that can go into savings. Finally, a beefy savings account!
Everything seems to be going well for the first couple of days, but then we notice that our car is making a strange sound so we take it to the mechanic. Luckily, it isn’t anything too serious, but the repair still costs $80, which was not in our initial budget.
The month continues on and is dragging because we did not budget for any fun. After 20 days, you just can’t take it anymore and you head out with your friends for a night on the town. It wasn’t anything too extravagant: just a dinner, a few clothing purchases, and some drinks at the local bar.
The end of the month finally shows up and you total up you expenses. You just can’t wait to see that $800 go into the savings account, but…you don’t have $800 left. In fact, you don’t even have $500 left. Your grocery expenses were larger than expected, you forgot to include your phone and utility bills in the budget, and you also had the above expenses which weren’t initially accounted for either. After all these expenses, you only have $200 left over. You thought you were going to ride that 2-wheeler without a problem (after all, you are an adult and should naturally be good at this budgeting stuff), but it turns out that not only did you fall on the pavement and skin your knee, but you broke your arm as well!
“This whole budgeting idea is stupid, who needs it? I busted my butt for an entire month and have only held onto $200. I’m done with this.”- you say to yourself.
But, you have to remember that keeping track of your money is the only way to grow wealthy. If you want to live well in the long run, you have to be willing to scrape your knees with your budget once in a while. It will not be easy, but you will get better. Soon, you will be able to put $500 into your saving account, then another $750, and then you might be able to cut some expenses and earn a little more for a monthly net income of $1,000! If you hold yourself accountable, you will soon be riding in the Tour de France of budgeting and will be well on your way to budgeting your way to wealth!
How about you all? What strategies do you employ for dealing with discouraging set-backs in your personal finances?
Share your experiences by commenting below!
***Photo courtesy of http://www.flickr.com/photos/sahdblunders/8644936719/sizes/l/
Obamacare Is Causing a Rise In Cash-Only Doctors
The following is a post by MPFJ staff writer, Kevin Mercadante, who is a professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry.
Obamacare is causing a rise in cash-only doctors, a trend that has been at work for several years but seems to be accelerating. We’re not seeing a wholesale shift of medical practices going from primarily insurance-based payments to cash, but the number making the conversion is increasing steadily, at least from very low levels.
There are a number of reasons why both a doctor or patient would want to go the cash-only route. Though it isn’t for everyone, there are circumstances where it makes a lot of sense.
Why a doctor would go cash-only
As much as anything, the healthcare industry is seeing massive shifts as a result of healthcare reform. What will be seen under Obamacare is more of a top-down system, which will invite a far higher level of rules and regulations. Many medical practices have already been struggling under the weight of increasing administrative responsibilities from healthcare insurance companies. But Obamacare is giving government a greater say in the process, which is increasing that burden substantially.
It’s not just that the increase in rules and regulations is merely irritating. Every healthcare practice experiences direct costs as a result of compliance. This will raise overhead in the form of increased staffing in order to meet compliance requirements. That will have the domino effect of also increasing indirect employee costs, higher insurance expenses, greater benefits, and even rental space for a larger staff.
A medical practice can sidestep these expenses by opting out of healthcare reform – and the insurance benefits it will provide – and going the cash-only route. It’s a form of cutting out the middleman – the insurance companies – in the healthcare industry.
Cash-only doctors are also able to treat patients the way they see fit. Participation in healthcare networks and their insurance company sponsors can create a series of enforced protocols, that a cash-only doctor does not have to adhere to. This gives the doctor much more flexibility in treating patients.
There’ll also be more flexibility in treating patients who are either struggling financially, or going without health insurance altogether. Doctors can charge lower fees with a cash-only basis, even adjusting those fees to the patient’s ability to pay.
Cash-only arrangements generally come in two forms: fee for service and subscription. Fee for service means that you can walk into a doctor’s office, receive treatment, pay in cash, and be on your way. With a subscription service, you pay a monthly fee to the practice, which can often get you unlimited visits.
Are there benefits to you as a patient?
There may be even more reasons why you as a patient would want to consider cash-only doctors. There are also downsides, and we’ll get to those in a minute. But first consider the following benefits:
People who don’t have health insurance.
Cash-only doctors will have an obvious advantage for people who don’t have any health insurance at all. Even though the healthcare reform law requires everyone to have health insurance, or face penalties, it’s still very likely that there will be millions of people without coverage anyway. Cash-only doctors will be a definite option for such people.
Cost. At some practices it may be possible to have doctor visits that will cost less than the co-payment you’ll need to pay under your health insurance plan. You may also get an increased level of service from a primary care physician, rather than getting shuttled off to a battery of specialists that are mostly matter of doctors practicing defensive medicine (that is, protecting themselves from lawsuits).
A return to the days of the family doctor. Under the current healthcare arrangement, doctors are typically limited to spending no more than a few minutes with each patient. The cost and burden of participating in a health insurance network require the doctor to see dozens of patients each day. Cash-only doctors won’t have that requirement, and will be in a position to spend as much time with you as is needed. Some cash-only doctors have even returned to making house calls.
Eliminating hassles with insurance companies. I don’t know about you, but any time I or anyone in my family receives any kind of medical treatment, it sets off a chain reaction of interactions with insurance companies to get the claim reimbursement for services rendered. Cash-only doctors will eliminate that interaction. It’s a cash and carry arrangement, and that’s the simplest form of business transaction.
“Concierge care”. This is essentially a subscription type service, and you pay a monthly fee for unlimited visits. It may also include a wider range of treatment options.
Competition to mainstream healthcare. We don’t usually think about the big picture when it comes to health care – we’re primarily interested in being treated. But cash-only doctors represent a potentially viable alternative to mainstream healthcare, and that may put downward pressure on fees and prices even with medical practices that work with insurance companies.
NOTE: The term “cash-only”, also extends to debit and credit cards, and presumably private installment payments. It’s use refers to the absence of funding from insurance companies.
The downsides of cash-only doctors
For all of its virtues, the concept of cash-only doctors is not without its limits. Most obvious of course, is that cash-only is only viable at the primary care level. If you are operating without health insurance, and relying on cash-only doctors to treat you, it’s just a question of time before you will have a major medical expense that you will have to pay out-of-pocket. Because of cost, it’s unlikely that the providers of such services will accept a cash-only option.
If you are young and healthy, and rarely use health care of any sort, the cash-only concept will work well for the occasional doctor visit. But if it includes participating in a monthly subscription service, it may end up costing you more than you ever get out of it in benefits.
And since cash-only doctors are not part of insurance arrangements, it is unlikely that they are in any wide healthcare networks that would provide a large number of choices as to providers for expanded medical services. Again, this can be a complication when healthcare needs rise beyond the primary care level. Sooner or later, you’ll brush up against the need to use the services of insurance-only providers, and you’ll have to be prepared for that outcome – even while using a cash-only primary doctor.
You can find cash-only doctors in your area simply by doing a web search that includes cash-only doctors along with your ZIP Code. And of course, never overlook the value of word-of-mouth referrals from other people.
How about you all? Have you ever used – or considered using – the services of a cash-only doctor?
Share your experiences by commenting below!
***Photo courtesy of http://www.flickr.com/photos/eroc/7175277081/sizes/n/
Health Care Showdown – Head-to-Head Comparison of an ObamaCare Plan vs. My Employer Plan
The following post is by MPFJ staff writer Travis. Travis is a customer blogger for Care One Debt Relief Services, and also appears weekly at Enemy of Debt. Travis candidly shares his personal journey to pay off $109,000 of credit card debt and the tips he’s learned along the way. As a father and husband he provides a unique perspective on balancing debt, finances, and family.
A man has his current health care plan dropped by his provider.
When he explores what options are now available to him, he finds for similar coverage the premium is much higher, as is the deductible. Another person claims to have been uninsured for years due to the cost, but now they are able to afford quality health care.
These two types of stories have been reported over and over again in the media over recent months as the The Affordable Health Care Act, more commonly called ObamaCare, continues to be a hotly debated topic.
I currently have health care through my employer, who offers choices for medical, dental, and vision care. I do pay out of pocket each month for that health care, but my employer picks up a large portion of the tab as part of my benefits package.
As the ObamaCare debate has raged on, I have often wondered what I could get for health care through my state’s government exchange site. This is where I would turn should my employer decide to drop health care from my benefits package, or if I would have a career change and become self-employed. I thought it would be a fun exercise to go through the motions of exploring my options, and then comparing to what I currently have through my employer.
My Current Plan
First, let’s take a look at some of the high points of my current health care plan
Medical:
Annual Deductible (individual/family): $1181/$3543
Routine/Preventative Services: No Charge
Other Office Visits and Outpatient Surgery: No Charge
Urgent Care and Walk In Clinics: 15% Out of Pocket, No Deductible
Inpatient Hospital and Surgery: 20% Out of Pocket, After Deductible
Emergency Room: 20% Out of Pocket, After Deductible + $150 copay
Prescription Drugs / Generic: 20% Out of Pocket, of discounted cost / $24 maximum
Prescription Drugs / Brand Name: 20% Out of Pocket, of discounted cost / $90 maximum
Dental:
Annual Deductible: None
Maximum Annual Benefit (per person): $500
Routine Exams, Xrays, Cleanings: No Charge
Minor Restorative Care (fillings): 20% Out of Pocket, of negotiated fee
Major Restorative Care (root canals, etc): Not Covered
Vision:
Annual Eye Exam: No Charge
Frames (once per year): $120 allowance, 20% off remaining balance
Lenses (standard): No Charge
Contact Lenses: $120 allowance, 15% off remaining balance
MNSure Plan
Then, I visited MNSure, the Affordable Health Care / Obamacare website for the State of Minnesota.
I plugged in some rudimentary information about my family and it listed 16 different medical plan options. The options were labeled as Platinum, Gold, Silver, or Bronze, with the coverage, options, and price decreasing respectively. There were NO platinum options available in my area, which I thought was very strange given that I live in Rochester, MN, the home of one of the best medical facilities in the world: The Mayo Clinic.
For the sake of comparison, I chose the Medical Applause Gold has plan, which was the top rated Gold plan offered.
Here’s the highlights of that plan:
Medical:
Annual Deductible (individual/family): $1300/$3900
Routine/Preventative Services: No Charge
Other Office Visits and Outpatient Surgery: 30% Out of Pocket / co-insurance after deductible
Urgent Care and Walk In Clinics: 30% Out of Pocket /co-insurance after deductible
Inpatient Hospital and Surgery: 30% Out of Pocket /co-insurance after deductible
Emergency Room: 30% Out of Pocket /co-insurance after deductible
Prescription Drugs / Generic: 30% Out of Pocket /co-insurance after deductible
Prescription Drugs / Brand Name: 30% Out of Pocket /co-insurance after deductible
This plan was medical only, and did not cover any dental care. I had to look separately for a Dental Plan. I selected a plan that was fairly close to the coverage I have through my employer. Ironically, it’s the plan that I had for years through my employer (Delta Dental) but is no longer offered.
Dental:
Annual Deductible: $50
Maximum Annual Benefit (per person): Data Not Available
Routine Exams, Xrays, Cleanings: No Charge
Minor Restorative Care (fillings): 80% coinsurance
Major Restorative Care (root canals, etc): 50% coinsurance
Maximum Out of Pocket Individual: $700
Vision:
I could find NO information about Vision Care on the MNSure Website. None. Zero. Zilch.
Cost / Premiums of Plans:
Then I gathered the cost of the programs. I noticed while doing my taxes that an amount was listed on my W2 stating the amount my employer kicked in for my health care. I took that amount and divided it by 12 (months) to get my employer’s monthly contribution to my health care. Then I added to it my payroll deduction for health care to get the final monthly cost of my employer based health care.
Employer Based Healthcare Monthly Cost: $1746.61
MNSure Based Healthcare Monthly Cost: $1316.30
Plan Comparison:
Medical:
It’s fairly obvious that the medical coverage through my employer is leaps and bounds better. While both plans offer preventative care at no charge, my current healthcare plan provides immediate coverage on the most common types of health care needs such as urgent care, ER visits, and prescription drugs. All of these are subject to the deductible for the MNSure plan. Even once the deductible is met, my current plan provides better coverage.
Dental:
Both plans provide bi-yearly cleanings and exams at no charge. My current plan provides better coverage on minor procedures such as fillings, but the Delta Care provides better coverage on major procedures. Plus Delta Care has a maximum out of pocket limit. This is one of those times when it’s really hard to judge which one is better. For day to day life, my current plan is better, but if a major dental situation arose, we would have a large bill to deal with.
Vision:
I couldn’t even find information about vision care on the MNSure website. So, my current plan wins by default.
Cost:
My care through my employer is quite a bit higher per month. I don’t actually see this as an out of pocket expense because my employer foots the bill for most of the cost, but we need to compare total cost for an apple to apple comparison. Is an extra $450 a month worth having vision care and the better medical care?
If I were footing the bill all by myself, I would say “No.” That’s over $5000 a year annually, and our out of pocket expenses for health care wouldn’t come anywhere near that if we had to purchase healthcare completely on our own, and had the option between these two plans.
Final Thoughts:
I learned several very important things by doing this exercise.
- The healthcare I have through my employer is really good.
- The true cost healthcare is crazy expensive!
- I would likely make much different choices if I had to foot the full bill for my healthcare.
- The government sponsored websites may not give all the options you need (where’s the vision care??)
While I gained some really great insight into my current healthcare, as well as the options available through the government exchange, I didn’t really gain any insight as to whether ObamaCare has really been a detriment to people who had previously been purchasing healthcare on their own.
How about you, readers? Do you purchase your own healthcare? What has your experience been when choosing your healthcare after the implementation of the Affordable Healthcare Act?
Image courtesy of photostock / FreeDigitalPhotos.net