Sunday, September 27, 2015

The "Holidays" are coming... Are you worried?

Sometimes I feel like there are all of these "extra things" that are costing me money.  This past month included back-to-school shopping (I teach in a high school), and an out-of-town visitor.  Next month I have a friend getting married out of state, and then we find ourselves full-blast into the Holiday spending extravaganza.  Our lives are all different, but there is one common thread here.  We all experience "extra things" that cost us money on a regular basis.  In fact, I bet if you stopped to do a little calculation, you will find that it is literally a monthly expense.  That being the case, you should have a category for it in your budget (we will talk budgets soon).

Well that might be fine and dandy, but I just got out of credit card debt.  I know that I don't have this "extra" category in my budget.  I will create it, but it doesn't currently exist.  The "extra things" are still coming, right now, in the form of the holiday season, and I am determined that they are not going to cause me to go backwards on my progress.  We will discuss budgets, other people's vacations, etc. in another post, but today let's talk about the holidays.  They are coming up, and I, for one, am not going to let them get me! So, how am I going to do it?

1.  Take care of the future.  Start that "budget category" for the "extra things."
2.  Menu planning.  My household size is 2, and we spend on average $60/week on groceries.  This is already a great number, and we already plan our menus, but that being said.  I am going to make a point to throw in more of our "cheap but healthy"  meals so as to get that number down by $20/week through the end of October.  I know that this will be difficult to do in November and December, so I am going to offset some of those costs now.  If I start this week, a $20/week savings  creates $100 over the next 5 weeks that can be applied to my "extra" category.
3.  Thanksgiving... This holiday is expensive in a sneaky way.  We don't buy gifts for each other, so we don't consider it far enough in advance, but if you are hosting, suddenly, it costs a small fortune!  Well, I plan to have a feast without spending a fortune.  The secret?  Don't make 20 dishes.  Have a gathering, either at your home or someone else's.   Create a sign-up list.  Maybe the host is in charge of the Turkey, stuffing, and mashed potatoes.  They also make their home look  nice an inviting (don't spend money on it).  At that point, the host is done cooking.  Hosts are notorious for telling people they don't need to bring anything.  Not this year!  All guests should be in charge of bringing a side, or dessert item.  They should sign up in advance so there are no surprises.  All guests should bring a few small to-go containers.  At the end of the party, each guest should take-away at the very least, lunch for the next day.  If you happen to have a huge "Thanksgiving budget" carry on!  If not, try out my strategy.  Thanksgiving parties are fun, and don't have to cost you a ton!
4.  Holiday Gifts...  Have this conversation now!  In my household, we are buying ONE gift for each other, and stuffing a stocking for each other.  We have a maximum we are allowed to spend.  Granted, we are a household of 2 adults.  Those of you with children will inform me that this will absolutely NOT FLY at your house.  If you have children, have your kids draw names for gift giving for each other.  Parents, set a dollar amount per child.  This is not to exceed what you actually have.  Under no circumstances are we to use our credit cards for this. Include your kids in this gift conversation.  Take the opportunity to teach them about financial responsibility.  That is the most important gift that you can give them!  You have to teach them (by your example) what it means to be financial responsible through the holidays.
5.  Get an "extra job" for the holiday season.  Now is the time to apply.  I have done this before.  Holiday help doesn't make a ton of money, but you can use that as your holiday budget.  I probably made an extra $500-700 last time I worked a holiday retail job.  I used that for two things.  Holiday spending, and future vacation money.  That way, I didn't have to use my regular paycheck for those things.
6.  Opt out of all of those holiday gift exchanges.  No one thinks you "don't like them" because you didn't do the office holiday gift exchange.  Just opt out.  Save the money.
7.  Don't obligate yourself to "guilt gifts."  You know what this means.  We all buy those last minute gifts for people because "they might be buying us something."  I want you to advertise to other people the following "Do not buy me a gift."  Tell them.  Taking the obligation away from them will also alleviate you of that same obligation.  You are to tell them that you are scaling way back on your gift-giving, and that you would like them to give you the gift of their company, but that's it.  No present.

Those are just a few of the things that I have done, and will do to help myself avoid a "Holiday Disaster."  I'd love to hear any strategies that have worked for you or your family over the years!

Thursday, September 24, 2015

Bonus Post: Free Online Personal Finance Course!!! (Limited Time Offer)

Alright folks, I want to let you know about a resource that is available to you for free for a limited time.  Suze Orman's personal finance course is available to you for free, but you must sign up by 9/25 8pm EST.

Go to:
Enter giftcode:  TODAY

I have signed up.  There are seven lessons in an easy to use format.  This presents a great opportunity to for each of us to get some things in our financial lives organized.  Join me in the journey, and sign up for this fabulous, free resource.

Saturday, September 19, 2015

How I saved over $10,000 on my dental bill!!!

About a month ago, I went to the dentist.  I, like most Americans, greatly dislike going to the dentist.  I am afraid of painful procedures and painful fees.  We all have to go to the dentist though.  There isn't much way around it.  Well, there is, but the alternative is even worse in the long run.

I decided that I wanted to go to a local, neighborhood operation, and I saw a dentist that was nice enough.  By the end of the appointment he had recommended three fillings, two crowns, two root canals, and didn't tell me anything about how much it would cost me.  Apparently, we needed to schedule another appointment for the next week, and we'd cover that information then.

Well, I wasn't going to schedule a procedure and not know how much it would cost me so, he sat down with me and gave me the following information.

All of theses treatments cost over $11,000 before insurance.  My insurance contributes about $1300 for these treatments.  This would leave the average person owing over $9000.  Well, I was told that since I am a teacher, they'd give me a special deal.  After I added the amounts that I would really have to pay, they totaled about $3000 (after insurance paid out).  Well, that sounded like an improvement, but I still didn't have $3000 sitting around.  I am just getting started on my emergency savings account.  I haven't built it up that far yet.  At this point, I was feeling overwhelmed.  I was freaked out about needing three fillings, two crowns, and two root canals.  I was also freaked out about not being able to afford them.  So, I made another appointment, and went home.

I am not the kind of person that can just sit and do nothing, so I sprung into action. I decided to get a second opinion.  I made an appointment at NYU's dental school.  It would cost me $95, and they don't take insurance, but they would provide me with paperwork to submit for insurance reimbursements.  The next day I cancelled my follow-up appointment, and contacted my dental insurance company to do my homework on the way my policy works (see last week's articles "5 Questions to Ask You Dental Insurance Provider").

Skipping forward,  I went to the dental school, and learned that I do NOT need three fillings, two crowns, and two root canals!  At this point, they say I need two fillings.  Now, I will be candid about this, it is still possible that this could change because at a dental school they have several checks and balances, and my student-dentist has the support of the overseeing dentist (who agrees with this diagnosis), but still has to defend our "treatment plan" to yet another supervising dentist above him.  Regardless, I assume this treatment plan passes the supervisory inspection.  That being said, my grand total will be $730 (this is for both fillings, a cleaning, and a full exam).  I should be reimbursed by my insurance for roughly half of it.  So, I started out getting a printout suggesting that I needed $11,000 worth of treatments, and am ending up paying roughly $300 out of pocket.

Now, I typically publish some sort of "to do" list for you....  So, let me give you my take-aways.

1.  Get a 2nd opinion.  Not all dentists have the same fee schedule.  Also, some dentists (or any health care practitioner) over-diagnose.  Remember, a dentist that runs his/her own practice has to set his fee schedules taking his/her overhead into account.  This might make some of you uncomfortable, but the truth is that in this country healthcare is a business that is out to make money.
2.  Consider a dental school.  I say this for multiple reasons.  First, the fees are lower.  Second, an educational environment has a different goal than a solo practitioner.  A school wants to educate.  It is not in their best interest to over-diagnose.  Schools tend to be fairly conservative, and do not like to treat things that are not necessary.  Yes, a student will work on you, but they have a licensed dentist check their work at every step.  You are in good hands.
3.  Make sure the fees are explained to you before you are about to get the work done.  The first dentist didn't plan on sharing any of this info with me until I insisted.  This would have been a huge set back.
4.  Invest in dental floss.  I know this one sounds silly, but several dentists have told me that flossing daily is the number one way to avoid having lots of work done in the future.  Besides, dental floss is way cheaper (and more pleasant) than a root canal.

Anyway, I hope my personal experience has given you some insight.  This sort of situation can be scary, and sometimes that fear overrides our attention to our wallet.  We MUST get the healthcare we need, but we must also be careful not to get procedures performed on us that we do not need.  We also have a right to shop around for someone that can do the work for cheaper.  Obviously we can't "drag our feet" on these matters because this is about our health, but I have to say, I am SO glad that I got a second opinion now, I  will only spend a few hundred dollars out of pocket rather than several thousand.  That was definitely worth the time and energy I spent doing my homework!

Saturday, September 12, 2015

Dental Insurance: The Top 5 Questions to Ask Your Provider

If you are anything like me, you would rather do just about anything than go to the dentist.  It's an uncomfortable situation at best.  You finally decide to put your adult suit on and go in because you think that a life of eating mashed potatoes and bananas does NOT sound better than going to the dentist. They poke, they prod, and then they tell you that you need work done.  "No problem!"  You think to yourself, "I've got dental insurance."  So, you think nothing of it, and schedule the work to be done.  Some time goes by, you get the work done like a responsible adult, and they present you with the bill.  It is gigantic!  How did this happen?  You have DENTAL INSURANCE?

Personally, I think the word "insurance" is misleading when it comes to your dental plan.  Most dental plans in the U.S. pay out very little.  It is important for you to know how to navigate your own dental insurance plan to get the most out of it, and more importantly, avoid having a huge bill that you cannot pay for.

I am going to briefly walk you through a list of questions that you need answered about your dental insurance plan, and why you need to know this information.  Attaining this information will probably be pretty easy if you either call into the helpline of the insurance provider, or use the insurance provider's website.

1.  Do I have to use a dentist that is on a specific list?
This may seem like a ridiculous question, but it is very important.  Sometimes, if you use a provider on a certain list, the fees will be more in your favor.

2.  What happens if I use a dentist that is not on this list?
Using a dentist that is not on their list may not be as big a deal as you expect.  They may say that you "have to" use a dentists from the list, but they might also say that it is not a requirement.  They might tell you that a dentist outside of their network is fine, but you will be required to pay up front, and then submit for reimbursement.  In fact, that is how mine works.  I found out that I can see any dentist I choose, but if they are outside of the network, I will pay and submit for reimbursement.  This has saved me a ton of money because, I have chosen to get my work done at the local dental school, and submit for reimbursement (more on this in next week's post).

3.  What percentage does the insurance pay, and what percentage am I responsible for?
You could learn that your insurance company will pay out 80% of certain types of work, leaving you responsible for 20%.  If your insurance works that way, you will want to know this.  A dentist in my area charges $2750 for a ceramic crown.  If you are responsible for 20% of it, that means you will pay $550.  My insurance does not work this way, but I have had insurance in the past that did, and there were instances where my 20% created more of a bill than I was prepared for.

4.  Is there a maximum annual payout?  If so, what is it?
Many dental insurance plans will pay out a certain amount per calendar year.  You need to know if this is the case.  If your insurance plan has a maximum annual payout, it could be, say $1000.  If you need more than just a filling or two, these funds can be eaten up very quickly.  Remember the fee listed for the crown?  This could wipe out your entire allotment for the year.

5. When does the "new year" start?
If your insurance company uses a maximum annual payout, you need to know how this "calendar year" runs.  Is it January- December, or something else?  Why is this important?  If they will pay out $1000 per calendar year, and it runs January-December, than means a NEW $1000 starts in January.  This is also a use it or lose it kind of system.  That means that money does not roll over from one year to the next.  For example, if you need a crown, and a couple of fillings, and it is November.  You may want to get the crown done in November, which uses up your $1000 for the year.  Then make an appointment for January (when your new money has come into play) to get the two fillings done.  A dentist in my area charged $395 for a filling.  If I only got a payout of $1000 per year on my insurance, and I tried to get the fillings and crown done in November, I could be left holding the bag on a lot of money.  Using this example, it would be worthwhile to spread the work over a couple of months and take advantage of both calendar years.

When I investigated my own insurance plan, I found out that if I use a dentist on their network, the dentist bills them directly, and I pay only my portion.  If I use a dentist outside of the network, I pay, then submit for reimbursement.  My insurance does not have an annual maximum payout, nor does it operate using a percentage.  They pay out using a fee schedule.  So, I got a copy of that and learned that they pay $75 for fillings, etc.

Once you've got the answer to the above questions, get a schedule of fees from your dentist.  If he or she does not have something printed up that they can hand you.  Ask them a few simple questions.  How much do you charge for a filling, a crown, a root canal, an extraction, bridge work, etc.  

After you are armed with all of this information, you should compare these fees with what your insurance will pay out.  You may find that if you need a cleaning and a filling, most of it is covered, but anything beyond that will be very expensive.  At least if you are armed with this information, you will be able to plan appropriately, and successfully avoid sticker shock.

In next week's post, I will cover the importance of shopping around for dentists based on their fee schedules, and why a dental school may, in fact, provide the best dental care for you and your family.  Until then, happy health, and happy saving.

Saturday, September 5, 2015

Taboo Topics: Why Talking About Money is NOT Impolite!

When I was younger I remember hearing people say that it isn't polite to talk about sex, politics, or money. Perhaps people were saying this because these topics can feel very personal.  When I stop to think about what we as a society have gotten from not discussing these topics, it makes me think we had better START TALKING!

When it comes to our money, we are afraid to say "I can't afford it," or "I don't have the money," or even  "I'm in debt."  Somehow, we tie our person worth to our ability to keep up with the Joneses.  Boy do I understand how difficult that is!  I live in New York City, which is very expensive.  I have had friends that like to go out on the weekends, see shows, have dinners out, and it's been hard for me because I want those things too.  Sometimes it makes me feel like a party pooper to decline invitations to do those things and say "I'm sorry, I just don't have the money for that."  While they are going out I am at home with my Netflix subscription and a $10 pizza as my weekly treat.

I decided a while back that I wasn't going to "not talk about money" because it "isn't polite."  I started saying "I'm watching my money," or "I'm trying to pay off a credit card."  Once I gave myself permission to say it out loud, I noticed something.  Other people were relieved.  I was being truthful, and very willing to talk about it.  That seemed to be infectious.  I noticed the people around me saying things like "So, do you want to just do dinner and game night at our place?" or "Me too!  I felt like I was the only one!"  Once I gave myself permission to be honest about my circumstances, others seemed to be willing to do the same.  I feel good about that because keeping up with the Joneses is a bit of a cycle.  Someone in my social circle does something or invites me to something, I am afraid to say I can't afford it, I do it anyway, I get more debt, then the next invite comes..."  I've cut that cycle.  In breaking the cycle, I've helped other people to do the same.  Don't get me wrong, I am only responsible for my own choices, but  there is strength in numbers.  If one person is willing to "talk about money" regardless of whether or not it is taboo, perhaps that is at least a step in the right direction.

I've even gotten bolder about "talking about money."  I just ask questions of my friends.  We are taught that we shouldn't ask other people about their money because it is their "personal affairs," but I'm not sorry that I ask.  I called a friend of mine and asked her point blank about her life insurance.  She has a small child that I love very much, and I was concerned.  I instigated a conversation with a different friend who was divorced, and had survived a bankruptcy.  I knew that she had done an amazing job of rebuilding her life and her credit.  I wanted to talk with her about the possibility of her buying her own home.  I felt confident that she could do it, and I thought that if she did, she would set herself up well for her future retirement.  I could give you plenty more examples of times I've been "nosey" and inquired about the finances of my friends.  Maybe this is an annoying habit I've acquired.  I do not regret it at all, and I have never had a friend upset with me for asking.  In fact, typically the person thanks me for bringing it up.

Perhaps this week's article sounds a bit more like a rant, but I've been thinking a bit about this.  We need to talk about money, just like we need to talk about political issues, sexual issues.  Ignoring these things has not proven to be much of a benefit.  Ask the questions of the people you care about, and practice saying your truth.  I have started saying "I'm watching my money" and "That's not in my budget right now" when it applies to my life.... and you know what?  Pizza and Netflix night is serving me well, and who knows, perhaps a few friends will crash my party!!!