Archive for Personal Finance

How Can A Chronic illness Or Age Affect Health Insurance?

Health Care Costs In AmericaThe following article is a guest post on behalf of HBF.

Chances are that if you have a chronic illness, or if you are a senior, you are going to be concerned about health insurance more so than many other people. The amount you spend in medical costs is likely to be in the high range so you want to make sure you are covered, see more at HBF.

Prior to the instigation of the Affordable Care Act there were many examples of people being refused health insurance when they had a chronic illness. Things have now changed, since the act came into being. Insurance providers are no longer allowed to refuse health insurance based solely on health grounds. In the case of the senior population Medicare is still in place for people aged 65 and over.

So if you have a serious health problem you’ll be covered?
If you purchase a health insurance plan in the newly created marketplace then an insurance provider is not permitted to refuse your application, or to cease your plan, based on the state of your health. As of 2015 this will also apply to any health insurance purchased outside of the marketplace.

What happens with your healthcare if you’re a senior?
As you get older, so your health care costs can rise dramatically. This makes it vitally important for you to ensure that you have sufficient health care coverage. This is the reason for the existence of the Medicare system. There are several different parts to this system, all of which apply to different costs and provisions.

Part A Medicare
Part A Medicare does not require the payment of any premiums. It’s designed to be a safety net to provide basic provision for the hospitalization or convalescence of those who qualify. You should be aware that you do not get full coverage and could still be liable for very high charges if your period of hospitalization is lengthy.

Part B Medicare
This type of Medicare covers 80% of costs for outpatient visits and therapy sessions. You have to pay premiums for this coverage; these payments are made straight from Social Security checks. Even with this cover there is still a good chance that you will experience high costs depending on how much health care you receive.

Part D Medicare
Part D Medicare is intended to provide towards prescription costs. It is a good idea to check with your pharmacist to see what level of this type of Medicare you require. It’s important to note that you need to apply for Part D Medicare as soon as you are entitled at the age of 65. If you fail to do so you stand the chance of being penalized with higher premiums for the rest of your life.

The most recent addition to Medicare
Medicare Advantage came into being as part of the The Balanced Budget Act of 1997 when it was known as part C Medicare. The premiums for this provision have a tendency to be high but the providers are usually reliable and reputable. It’s a definite improvement on the basic Medicare provision for seniors.

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Are Loans a Good Idea to Pay Off Credit Card Debt?

Credit CardsThe following article is brought to you by Travis Holmes.

Credit cards are open lines of revolving credit, often charging high interest rates and tempting the consumer to run up a high amount of debt without really thinking about it. By the credit card companies own admission, this form of credit is not meant to be used often or extensively, and no one should carry a debt.

When facing a situation where you are carrying credit card debt, it is vital to find ways to pay as little interest as possible, without doing anything to damage your credit score. One of the better ways of handling this is to transition the debt to a personal loan, and close all but the oldest credit card account you have. Here are a few reasons why you should do this.

Lower Interest Rate
Credit card companies can often charge over twenty percent in interest. This can result in the average consumer spending a great deal of money in maintaining a debt, rather than paying it off. Over the long haul, having to spend money on interest decreases the fiscal strength of the borrower and actually increase the amount of debt carried.

A personal loan has a fixed interest rate, and since it is not a revolving line of credit it is impossible to add new principal to it. In short, it is a one-shot deal, with limited interest and a payment plan that is predictable.

Take note not all loans will have a lower interest rate. Some quick loans might be good for your situation but may carry a higher rate. It’s best to verify the rate and do the math yourself.

One Line of Revolving Credit
By closing out all but the oldest credit card account, the consumer is doing two things. The first is limiting the potential for future debt, by decreasing the amount of available credit at any given time. Since you will have less free credit to utilize, it would be harder to make impulse purchases that land people in debt to begin with. This article helps you weigh the pros and cons of both.

The second reason for keeping the oldest account open is to take advantage of long term credit on the consumer’s credit report. A credit report is only as strong as the oldest item on it, so it makes more sense to keep a credit card in play if the consumer has had that account for several years. Doing so can reduce the amount of interest paid on other forms of credit, including the personal loan.

Additionally, having an open line of credit is a good thing in an emergency. It can provide an emergency cushion if you encounter an expense that you cannot fit in your monthly budget, but can pay over the course of two or three months. This becomes less needed as the consumer starts saving money, but starting out this flexibility is crucial.

Transitioning debt from a higher interest rate, revolving account to a lower interest rate, closed account, can serve as a way of lowering the amount of hard earned money wasted on interest.

Doing so can set the stage for a better, more stable financial future as long as certain steps are taken at the same time. Eliminate most of your open credit, in order to limit potential exposure to negative forms of debt. Start putting back the extra cash each month, to provide a means of paying for emergency expenses without having to turn to credit.

A personal loan can be invaluable when trying to improve one’s fiscal health. By taking the time to formulate a plan, it is possible to create a system that will lead the consumer to a better and more stable financial future. All it takes is the ability to take advantage of the lower interest rates.

How To Curb Your Impulse Spending

Piggy Bank SavingsImpulse spending can cause havoc to any well-developed budget. No matter how carefully you plan your budget, if you impulsively diverge from your spending plan, your budget will be worthless. Controlling impulse spending is imperative if you are going to live frugally.

Getting away from the impulses that urge you to make unplanned purchases is often an exercise in trial and error. The system that works for one person may not work for another. Fortunately, there are several different methods of curbing these impulses. Try one of these to see if they help you. (I didn’t mention freezing your money but hey if it works give it a shot!)

Avoid temptation.
Stay away from your weak points that tempt you to make impulse purchases. If you are compelled by the attractive window displays at your local mall to buy the featured items, you can choose not to go into the mall. Likewise, if discount stores like Wal-mart and Target are your weakness, make a shopping list and send your spouse to the store.

Leave credit cards at home.
Credit cards make it easy to make purchases without worrying about the financial consequences of your purchase. You won’t feel the pinch of credit card purchases until the monthly statement arrives at your house. If credit cards are your Achilles’ heel when it comes to spending, leave them at home. When you plan to use your card, you can remove it from its hiding spot and return it after the purchase is complete.

Make it hard to make purchases.
Carrying only the money that you need each day will make it very difficult to make unplanned purchases. If you don’t have the means to buy anything, you simply can’t do it.

Get off the mailing lists.
Catalogs often inundate people with temptation to buy something. Maybe the catalog featuring clothes for next seasons is simply too good to pass up. Maybe the clearance items compel you to make a bargain purchase. As these catalogs appear in your mailbox, call the customer service number on the back and ask to be removed from the mailing list. Then, throw the catalog away before it can tempt you.

Get inspired.
Dieters use motivational pictures all the time to help them work towards their goal. If cutting impulse spending out of your life is your goal, find something that inspires you and keep it in your wallet. Maybe your family is saving for a vacation to Disney World. If that’s the case, keep a picture of a Disney character with you. Then, every time you open your purse to buy something you’ll be reminded of your goal.