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Health care is a really big issue in our country. And, it’s no wonder. Costs seem to be going up and up and folks are getting squeezed financially to keep up. Today, it’s vital you are getting the most out of your health insurance coverage so that you can limit your out-of-pocket expenses.
I’m fortunate enough that my employer has good health insurance benefits. Many do not have this luxury. And, it seems that more and more businesses are moving towards “consumer-driven health plans” with higher deductibles to help curb the rising costs of healthcare.
I checked with a family member who works in the health insurance field to see about what folks can do to make sure they aren’t paying too much for doctor visits and are able to get the most out of their coverage.
Here were some of their suggestions:
- Understand what is the best coverage for you. Each employer has their own unique coverage plan that has been selected by its leadership. Some offer different plans to choose from – while others only provide one option. If you have a choice – seek to understand the best option for your individual situation. If you are single, healthy and have little family history of recurring health issues – you may be looking at a high-deductible plan. If you are a family man with 4 children – you are likely going to be looking at a full-coverage plan – which will have more depth to it.
- Know your benefits. This requires some work on your part – but it can save a lot of money. If you know exactly what is covered in your plan, the chances of a benefit not getting covered becomes less and less. While you may be provided with a one to two page summary of your benefits when you enroll in your employer’s health plan option, you are also entitled to see something that is most of the time referred to as a “certificate of benefits”. This is a more detailed description of covered (or not covered) services and equipment and you can obtain this from your human resources department (if it hasn’t been supplied already).
- Stay in the network. Insurance companies make contractual agreements with selected providers to improve care and get better rates. These providers are then in that insurers “network”. You’ll want to make sure you stay within this group outlined in your plan to pay the least out-of-pocket.
- Don’t always trust the insurance company to give you the right coverage information over-the-phone or online. I know this from experience in our own family. Faced with a high cost medical expense – we were initially told by the insurer that a procedure would not be covered. After doing some of our own investigation in the certificate of benefits, we uncovered that – in fact – the procedure was covered. This is why its vital you know your benefits.
- Ask for the diagnosis code and CPT (or Current Procedural Terminology) codes. After your visit to the doctor, be sure to get a proper diagnostic code and ask for the CPT code they will be sending to the insurance company. If you provide your health insurance company with this information, they’ll be better equipped to tell you if future treatments are covered.
- Document, document. It’s possible that you may be told by your health plan that a certain procedure is covered, only to find out after that you’ve been stuck with the bill. This is why it’s important to document your conversations with your health care provider and insurance company (name of person you spoke with, date, time, etc) so that you’ll be able to counter any non-payment. It’s possible a mistake was made and asking the provider to send the claim in again or filing an appeal can also be beneficial.
- Negotiate. Given the present financial climate, many providers are willing to negotiate on certain out-of-pocket expenses. It never hurts to ask for a reduced rate.
We hope this helps. Healthcare can be a confusing and complicated process which can be made worse when you are undergoing a health crisis. Make sure you are prepared well in advance.
Are there other ways you are getting the most out of your coverage?
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We all know that protecting your assets and keeping your investment portfolio as diverse as possible is important to building up your investment and that’s why many investors look to keep some of their assets outside of the US. Getting started in investing abroad isn’t as difficult as you might imagine and can do a lot to bolster your portfolio.
If you’re looking to invest abroad, one of the best ways to see a return is to invest in the strong markets in the UK. There is a low barrier of entry to investing in UK-based funds that invest in foreign shares and this is what most American investors choose when making their first foray into the UK markets. As the fund will be invested in foreign shares, this approach will net you a diversified portfolio while saving you the trouble of selecting individual stocks. You can choose between a closed-end fund, exchange-traded fund or open-ended fund, but all of them will enable you to trade through a broker. Closed-end funds and exchange-traded funds are dealt through a stockbroker, while open-ended funds go through a financial advisor or specialist funds broker.
If you want the freedom to choose your own stocks, buying UK-listed companies that receive a notable chunk of their revenue from abroad is a sure bet. A large number of foreign companies choose to list their shares in the UK as it can be easier for them to raise money in London, while many FTSE 100 companies* receive a notable amount of their revenue from emerging markets abroad. You can select your shares and then purchase them through your stockbroker just like any other stock.
The most important thing when investing in markets abroad is to find yourself a good stockbroker, but with that in your pocket investing in the UK is a breeze and can net you huge rewards.
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I’ve always been fascinated by politics and the people who choose to run for office. So, if you aren’t much into politics, I still hope you stay tuned as I try and explain a topic that I’ve just recently learned more about. (They tell you in blogging school not to delve into politics and religion – but I’m ignoring conventional wisdom here and diving right in.)
Every presidential season, as time gets nearer to pick a party candidate, the scrutiny gets more and more severe for all front-runners. The media, opposing parties, start digging into a candidates personal life in hopes of finding a “scoop” or something that might (in the case of the opposition) make their hopeful look more – well – hopeful.
And so, we find ourselves right smack in the middle of it. With GOP candidate Mitt Romney running neck in neck with Newt Gingrich – the hunting into personal matters has grown intense.
Today (Tuesday), Romney released his tax records for the past couple years, showing that he made about $42 million in 2010 and 2011 (est.) And, the “effective” tax rate for those years was about 14%.
Now according to Reuters, the average high-buck maker like Romney pays about 35% in personal taxes yearly.
So, is there a problem here?
Well, not really. According to my high school level research, Romney uses a legal “loophole” in the tax system which is related to something called carried interest. In essence, it allows people to receive lots of moola working at a private equity firm and then only pay the taxes based on a captial gains tax rate – which is a lot lower than the personal income tax rate.
So, it seems to me that Romney really hasn’t been working (in the sense of a 9-5 job like most of us) these past few years – but has been living on monies received through these investments of his. This is why he’s paying a capital gains rate (of or around 15%).
I hope you learned something and are more educated about this now (as I am). I’m not advocating any one candidate over another right n0w – just trying to sort this out as we go along and not try and get swayed so much about what I hear in the media.
Do you think it’s right that a wealthy American like Romney pay so little in taxes – as a percentage?
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In February 2008, I first read the book, “Multiple Streams of Income” by Robert G Allen. I was looking at other ways of generating income for my family as we were soon expecting our second child. It talked about an investment vehicle called tax liens, and said that anyone could earn 12-24% interest annually, and that you could own either land or a house free and clear with a few thousand dollars. I remember blazing through the chapter and not being able to put the book down. I couldn’t believe that there is an investment out there that can earn this type of interest and I had never heard of it before. Was this true? Or was this author making this up? Within the week I had to find out more information, so I bought the book “Profit by Investing in Real Estate Tax Liens” by Larry B. Loftis. In both books I learned a number of things, and quickly signed up for my first lien sale in Nebraska.
Here are a few of the basics I learned along the way that might help you.
What are tax liens?
Tax liens are basically where the county has a property owner that hasn’t paid their taxes on time, but still need to generate income in order to pay for their services and utilities (like school teachers, firefighters, building rent, roads, and other county services). So in order for the county to make sure those utilities are still paid, the county has the right to offer a lien auction. This is where investors or individuals have the right to pay the owner’s back taxes and hold a lien on your house. In exchange the investor is paid at a certain interest rate defined by the county. In Nebraska – most typically – this is 14% annual interest. If the owner doesn’t pay back the taxes within three years, and the lien investor keeps paying the subsequent taxes, then the lien holder has the right to foreclose on the house/land (more to come on how this process is done in the future).
When are Nebraska tax liens sales?
Tax lien sales occur the first Monday in March every year.
How much interest does the county pay?
Most counties in Nebraska pay 14% annually, but some counties offer auctions that allow bidders to competitively bid down the interest rate, so whoever is willing to accept the lowest interest rate wins.
How do I get started in investing in tax liens in Nebraska?
First off, get a full list of the counties auction lien list. Usually this is published both in the county newspapers and online three weeks prior to March’s first Monday. Make sure to get a full list that has all the parcels, lien #’s, addresses, back taxes owed, and most importantly the assessed values. Most often these list (online lists) are in excel format, and are easy to manipulate the data to find what properties are the most ideal to invest in.
Can I lose money on Nebraska tax liens?
Yes. Like any investments there is definitely risks, and tax liens are no different. However, most of the risks are foreknown in tax liens, and can be avoided. Investors can lose money by buying liens on properties where the back taxes are more then the assessed value. Another way, is when some investors buy liens on properties which can’t be developed on, which might include swamp land, utility ditches, or non-conforming property lines. In either scenario the investor can get caught owning property that is essentially worthless, and impossible to recoup their principal.
In part 2 of my series on “How to invest in Nebraska tax liens”, I’ll discuss some of the pitfalls, process of foreclosing, and how to help ensure you will make money on your Nebraska lien.
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This is a question that has bothered me ever since I bought my first home. I must have looked at single-family homes and townhomes (plus condos) for a good year or so before settling on a townhome.
And, this is not an easy question to answer. I wrote down and thought about the pros and cons of each before buying – and I want to share what were some of my thoughts then as well as some things I’ve learned being a homeowner for several years now. You may come to a different point of view – and I would welcome hearing it and the why behind it!
| Townhomes | |
| Pros | Cons |
| Little to no outside maintenance | Monthly association dues |
| No large-scale outside repairs to budget | Occasional assessments |
| Often house older residents (quieter) | Sometimes management or board slow to move |
| May have pets | Need to stay within rules/regulations |
| Lower cost to own | Limit on pets |
| Easy to maintain | Can hear neighbors through walls |
| Lower utility bills | Bad management or board |
| No mowing or shoveling | Don’t appreciate as fast as single-family homes |
| No landscaping | Exteriors must be “uniform” |
| Board/management company can assist with repairs | Not as much house |
| Chance to meet more residents | Sometimes harder to sell |
| Opportunity to be involved on the board | |
| More community feel |
| Homes | |
| Pros | Cons |
| Home is stand-alone | Need more tools |
| Yard is yours | Have to manage exterior |
| Can make loud noises in house | High-cost repairs (roof, siding, doors, etc) |
| No limit on pets | Often higher utility bills |
| Do anything to your landscaping | Lots of hours to keep up |
| Add on – remodel without approvals from board | Must mow, shovel, paint, water… |
| Appraise faster – sell easier | Harder to just leave if traveling a lot |
Of course, not exhaustive – but pros and cons are always a good step in making a decision. For me, the townhome was just more attractive of an option.
But, now, let’s consider costs. And, this isn’t as easy – because every place is different. For the sake of argument and consideration, I’m going to do rough estimates about what things might cost in my area.
| Monthly Costs | |||
| Townhome | Cost | Home | Cost |
| Dues | $ 200.00 | Maintanence | $ 100.00 |
| Utilities | $ 200.00 | Utilities | $ 250.00 |
| Cable | $ 125.00 | Cable | $ 125.00 |
| Taxes | $ 150.00 | Taxes | $ 183.00 |
| Mortgage | $ 1,200.00 | Mortgage | $ 1,500.00 |
| TOTAL | $ 1875.00 | TOTAL | $ 2158.00 |
Of course, these costs are pretty simplified and ball-park. But, we can assume that most single-family homes are going to pay higher taxes (depending on location), higher mortgage (larger home) and will likely pay more in utilities (larger home).
Our tallies do not take into consideration the idea of deferred maintenance on things such as roofs, siding, etc. Whereas a townhome owner’s dues go towards “reserves” for the association – the single-family home owner does not have this luxury and will end up paying a lump sum in one sitting when repairs need to be made. Associations do impose assessments from time to time to get caught up on reserves or to pay for a capital project (which just happened to us) – all in all though – it’s up to the single-family owner to be saving for the large future expenses.
I’ll let my hypothetical numbers speak for themselves. There are probably more scientific and better cost-analysis ways to go about this – but this has been good enough for me.
What are your thoughts? Do you live in a townhome or single-family home? Which do you feel is the cheaper one?
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Credit cards are plagued with a negative reputation. The media frequently discusses the harmful aspects of using them. Traditionally that is carrying balances, missing payments and increasing interest rates. However, there are plenty of positive reasons to use credit cards. And with proper usage, credit cards can be a part of your frugal lifestyle.
Using credit cards effectively to save money takes attention to detail and diligence. Below are four ways to use credit cards to your advantage.
- Rewards
You’ve seen the commercials on television. Credit cards with reward programs are all over the place. You can accumulate air miles, gift cards, gadgets, roadside assistance and more. These rewards can save you money during vacations, holidays and for gift giving. There are limitations to those rewards, it’s imperative that you read the fine print, just one missed payment can ruin a reward benefit. - Cash Back
A number of credit cards offer cash back based on the amount of money you spend. Capital One, Citibank, Discover and American Express are among those cards offering cash back. Some will offer a percentage of your quarterly or yearly spending, typically 1-5% and even 20% with one Discover card. While other cards offer a dollar amount for every $100 spent or a specific amount once you have reached a predetermined amount spent. Additionally, there are credit cards offering a referral bonus when have a friend sign up for the card. - Maintaining Interest Rates
Nothing ruins frugality like wasting money and nothing wastes money more than an increasing interest rate. Missing a payment or being late, even by one day can affect your interest rate. While missing a payment causes you to pay interest, thereby wasting money, an increased interest rate can affect any rewards or benefits you may have. Paying attention to your credit card interest rates* is crucial for maintaining a frugal relationship with them. - Willingness to Change
Credit cards are notorious for changing their reward programs. They’re hoping that users will continue to use their card even after programs change. As a frugal person, you can not let that happen. You must be willing to change credit cards when either a better program comes along or your current credit card changes their beneficial rewards program.
Frugality and credit cards can exist in the same financial plan. The key is to maintain knowledge about the credit cards and their regulations. Doing so while also using the card properly will ensure your success.
This article was written by the Debt Princess. Check out her blog at The Debt Princess where she offers “lessons in what not to do”.
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This past month, I’ve been pulled over by the police not once, but twice. No, it’s not because of poor driving or failing to obey a traffic light. It was mainly attributed to my faulty memory.
You see, I forgot to renew my tabs (should have used this memory tip for rubber bands).
I’m really ashamed to admit it. I am one of those who puts all their bills and anything of importance on my Google Calendar with alerts and all. But, I seemed to have mixed this car up with the other one and figured tabs were already purchased.
What could have been a $108 fine here in Minnesota, turned out to be a warning. I was well past the 10-day grace period.
Fortunately, both officers let me off easy with warnings – although I was required to mail in proof of insurance on the second occurrence (which I had inadvertently taken out of the car after the first pull-over).
Okay – onto why I’m writing about my offenses.
There was one thing I did during these ordeals that probably worked in my favor. I was honest and respectful. Not tooting the horn here – but there is a case to be made – that if you want to save more money.. be nice!
(And, I’m not talking bout “fakey” nice. It should be genuine.)
So, here are a few ways you can save through your “niceness”.
- Lower your bills. Say you want to lower your phone bill. When you call the phone company and get hooked up to a representative, they’ll likely use their name to introduce themselves. Make sure you say hi, using their name and put your niceness into gear. Folks are more willing to help people they like.
- Lower grocery bill. I know this is sometimes hard. You just want to get through the check-out line and out the store. You’re not there to make friends or chit-chat. But, let’s remember there are real people who are working behind the check-out counter. They’ve been standing on their feet for a long time, listening to consistent beeping. And sometimes, they’ll scan a coupon you may have overlooked. Don’t give ‘em a reason not to.
- Get other discounts. Have a hairdresser you like? Refer your friends to them. Perhaps your next visit will be free. Have a good insurance man? Refer someone. Maybe they’ll look twice at your auto policy for extra discounts.
- Get a raise. The workplace is a great place to pour out your genuine nice nature. Be the employee to make your boss look good and don’t take the credit. Take the initiative on tasks that no one wants. Be interested in your boss and co-workers.
Not exhaustive for sure. But it seems to me, that more often than not, the nice gal or guy can get ahead.
Can you share ways you’ve saved through your niceness or honesty?
