Not Made of Money

When I got the co-payment bill for my MRI, I was ready to “take forever” to pay it back. A teacher’s salary isn’t exactly conducive to a lot of available cash and the debt was over $700. I found a way to reduce the amount by 30%. My wife broke a leg a couple of years ago and again, the hospital’s and doctors’ co-payments were rather stiff. It never ceases to amaze me how a five minute visit by a physician can lead to a $350 fee and how a simple glass of water in the hospital can cost a lot more than a good bottle of wine. But these experiences allowed me to become a lot more savvy on how to reduce medical bills.
Prescription Drugs
Allow me to start with my prescription drugs, all four of them. For several years I was content to pick them up at my local pharmacy every month at a cost of approximately $30 of co-pay for generic drugs. A poster in my school caught my attention suddenly: Receive your medications by mail every 3 months. That seemed a lot more efficient as I no longer had to stand in tedious lines at the pharmacy almost every week. But there was an added benefit: $0 co-payment for generics. Hey, I said to myself! I just saved about $90. Of course, it helps to have a good medical plan provided by your employer. If you do have one, check with the insurance company about getting a 3-month supply; at the very least, you’ll save time and gas.
Negotiate, Negotiate
There are two important steps to take when faced with medical bills, especially from hospitals:
1. Check every item with a microscope to make sure you actually received the service or the product. Hospitals tend to “pad” their accounts by “mistake” of course (who would believe it?) so fight hard if you detect an error.
2. Offer immediate cash if you can afford it, which I did for my MRI, and you almost certainly will get a good discount. This will also work with doctors who’d rather avoid the paperwork involved in receiving small amounts every month or using a collection agency.
When you have to program elective surgery, do your negotiating before the procedure is done. Try to “charm” the doctor into reducing his fee if you are in the category of middle or low income; most doctors will agree to give you a discount if you come out frankly and explain your financial concerns. Even if you have insurance, not having any in case of a major surgery would simply bankrupt you, your co-pays might just be too high. In addition, do the following:

1. Find out what the Medicare cost of the operation is; even if you don’t have Medicare yet, it will help you determine what a fair amount is. Accept the fact that it may be a little higher than Medicare, but not outrageously so.
2. If your surgeon charges too much, shop around. There are plenty of good doctors who might be more reasonable.
3. Consider the real possibility of having the operation outside the U.S. Many insurances will cover surgeries in Mexico knowing that it will cost them less. Do your homework before you select a Mexican doctor and a Mexican hospital. The city of Monterrey is famous for its excellent healthcare. This applies especially to dental care which is extremely costly in the U.S.
4. Do not go to the emergency room for minor injuries or illnesses. Use local clinics which are much cheaper.
5. When you have your regular visit with your primary care doctor, ask the nurse whether they have samples. It pays to establish a cordial relation with them (the nurses). My wife was able to get a 3-month supply of cholesterol drugs for free.

A final thought; why didn’t I think of it before? Stay in shape and eat right. An ounce of prevention is… you know the rest.

Many American families live on a fantasy budget; they really believe that, somehow, they will find the money eventually to pay for their maxed-out credit cards and/or store credit purchases. It’s called wishful thinking and since economic times are hard it’s time to come back to reality. Ideally, we should all be limited by the cash in our pockets; in fact, we all know that’s pretty much impossible. Sometimes buying on credit is an absolute necessity, such a house and a car, and other times emergencies pop up which force us to solve the problem immediately with a credit card. But the key is to plan ahead to make sure the added burden will be taken care of in a few months.
How to Organize a Budget
As I have a wonderful wife who organizes all our expenses very carefully and who knows almost to the cent what our checking account balance is, I don’t really worry about my family budget. If however you have trouble balancing your monthly budget, allow me to give you a few tips:

1. Make a list of all the expenses you know you’ll have during the month following payday. Use estimates if necessary, for example food, clothing, gas, maintenance, leisure (entertainment), and include a small amount for unexpected disbursements.
2. Compare the total to your net income, also known as take-home pay. If you see a deficit, in other words your net pay doesn’t cover all the expenses, then you have no choice but to start spending less. I repeat: You have no choice; you have to cut your budget until you have a surplus of at least 10%.
3. The process should take you a couple of hours every month or even longer. It’s time well worth the effort. Get together with your spouse or partner and motivate each other to find a way to save and stay within the family budget.

4. Keep a careful account of each and every expense during the month and when payday comes around, compare your estimated budget with the actual facts. Adjust for the following month as needed.

Saving Tips

1. Cut the fat.
Gym memberships you hardly use? Cut it. Eating out twice a week? Cut it to once every 15 days. Going to the movies every week? Stay at home and rent a movie. Spending too much on groceries? Make a list and stick to it. Magazine subscriptions? Cut it completely. Buying expensive books? Your local public library may have very cheap used books and magazines for sale. Internet on every cell phone? Come on, you don’t really need these expensive family plans. Stick to basics.
2. Use the coupons.
Yes, I know that cutting out coupons out of the Sunday paper is a fastidious task. But think of how much money you save at the supermarket. Consider also going online and doing research on those coupon sites. You may save $20 to $40 every week on your food and other household items for a family of four.
3. Timely purchases
My wife has a special budget for clothing: She buys her winter clothes at the beginning of spring and the summer stuff at the beginning of fall. You can save a bundle by taking advantage of special sales; stores want to get rid of stuff not in season.
4. Energy efficient appliances
From light bulbs to electric appliances, shop for the ones which are designated as energy efficient. “Qualifying products purchased between January 1, 2009 and December 31, 2010 are eligible for a tax credit equal to 30 percent of the product cost. Installation is not included; be sure to obtain an itemized invoice from your retailer or installer. The maximum amount of homeowner credit for all improvements combined (including roofing, insulation, HVAC, and water heaters) is $1,500 during 2009 and 2010.” A tax credit is always welcome and the energy you save may add a few hundred dollars to your budget every year.
Save, Save, Save
There is always the risk of being laid off, of being in an accident, of a natural disaster striking your home or having a serious illness. Your overall budget should take this into account and if there is no other way, use a credit card and program monthly payments until the debt is paid off. Meanwhile, if no emergency occurs (Hallelujah!) place the saved money into a financial instrument that can be easily redeemed without penalty.

The following article is a guest post. Please see my disclosure statement.

Buying your first home is a huge milestone in your life. It’s exciting, thrilling, terrifying, and nerve-wracking all in one, and we all want it to go as smoothly as possible.

Most of us won’t have the funds to buy our property outright. Instead, we’ll have to rely on mortgage lenders to assist us. However, although there are lots of deals available for those with limited funds, it helps to have as much of your own money as possible to put towards a deposit. The more you have, the better the terms that you’ll be able to secure, and the sooner you’ll be able to pay off your indebtedness.

But saving can prove challenging, and lots of people have no idea of where to begin. If you’re in need of a little help, then here are three top tips to inspire you…

#1: Budget

The simplest and most effective way to increase your savings is by budgeting. Most of us are all too happy to confuse luxuries with essentials, and our laxity means that we spend a lot more than we need to. It’s amazing how much of a saving simply sitting down and looking at your monthly outgoings can help you to make. Small measures such as reducing your meals out, cutting down on your shopping sprees, and choosing economy options at the supermarket can mean all the difference come month’s end.

#2: Make a Little Extra on the Side

However much you budget, your total may still prove slow to grow. If this is the case, then it helps to give your monthly income a little boost. The majority of people with a fulltime job simply don’t have the availability or energy to do more hours, but it’s often the case that hobbies can be turned into a profitable venture in their own right. If you like animals, could you offer pet sitting services on a weekend? If you have a flair for writing, could you take on some freelance content projects in the evenings? There are lots of little ways to increase your monthly total; sometimes, you simply have to have your eyes opened to the possibilities.

#3: Look at the Government’s Help to Buy ISAs

Thirdly and finally, why not explore the government’s Help to Buy ISAs to see if they could help to boost your savings? Introduced as part of the government’s wider Help to Buy scheme, this handy financial instrument can really assist in bolstering your buying power, providing some much needed impetus to those who are struggling.

Save your deposit and kick-start your property owning dreams today with these three handy hints and tips.

The following article is a guest post. Please see my disclosure statement.

Getting a home loan can be expensive. Understandably, though, it is the best investment that a person can ever have, so sure it doesn’t come easy. But there are ways to make home loans more accessible and cost-effective to the working professionals and real estate investors. How is that even possible? Read on.

1. Consider getting a special packaged mortgage
Getting the right type of mortgage in the beginning can save you money and time. You should get a special packaged mortgage if you like the idea of;

Taking out at least $250,000 home loan
Using multiple credit cards
Having a variable rate home loan
Fixing your loan in the near future; or part variable, part fixed
Bundling your several loans all together

This home loan package attracts many potential customers for its money-saving benefits. It can reduce a substantial amount of money in interest off of your mortgage and it may come with affordable annual fees. Thus, if used correctly, you will be able to pay your loan at a shorter period of time.

2. Combine all of your active loans into a single package
This can be done by linking up your variable rate home loans to a 100-percent offset account. If you are a working professional, you might want to have your employer transfer a portion of your salary to a bank account that is linked to your home loan. As soon as the account receives money to keep the maintaining balance at bay, it may also reduce the payable interest on your loans in no time. For example, a $10,000 maintaining balance throughout the life of your home loan could give you approximately $47,000 savings off of 7.22% p.a. interest rate over a 25-year loan term.

3. Ask your lender about any available discounts
Yes, it is possible get discounts on home loan products and interest rates. For instance, in special packaged mortgages, the lender may charge you with an annual fee of up to $400. In return, you will be entitled to receive a friendly discount on the interest rate and on some other services like insurance products, check accounts, credit cards, and personal loans. The amount of discount largely depends on the size of all your loans, especially if the total is equal to a minimum of $250,000. And even if you have multiple loans in the package, you will only have to pay for a single annual fee.

4. Use your credit card(s)
When you’re under a special packaged mortgage, it is advisable to make use of your credit card(s) when purchasing items. No, really it works. You should use your credit card on every purchase you make rather than withdrawing funds from your account. And then, when the bill is due, use your linked (offset) account to pay for it on-time so as to avoid paying for the interest on your credit card bill. Add the fact that some credit card facilities offer a reward program, so you should be able to earn enough points to reimburse some items or earn discounts.

Indeed, there are cost-effective ways to go beyond a typical home loan. You can combine different loan products all together to avail of discounts on the interest rate throughout the life of the loan. As a result, you will earn enough savings to shorten your payment term. Just make sure to discuss with your lender about the features and discounts attached to a home loan product so you will be able to know if it is exactly what you’re looking for.

Christmas is a time of celebration. It is also a time for expenses. You know that you are going to give gifts to your family, your friends and your coworkers. You may also have to prepare a special dinner or a party. It can put a strain on your budget if you do not prepare for it. Fortunately, there are several ways you can prepare for these expenses now.

Go Over Last Year’s Christmas Expenses
In order to have an idea of what your expenditures were last year, take another look at your bills last Christmas. What items did you buy? Include everything associated with it – cards, clothes, gifts, decorations, food, etc.

Determine Whether You Spent Appropriately or Not
Sometimes, you are so engaged in the activities of the Christmas season that you open your purse and pull out your money without thinking. Unfortunately, this is not a good habit, and can even put you in debt. After reviewing what your expenses are, determine whether such expenses are really necessary.

Prepare Your Budget
You now have the important items you bought last year, together with their costs. Be mindful that what was true last year may not be true this year; as there is annual inflation. What was valuable last year may also have lost its value this year. Take into account probable changes, then list them and their costs. Include them in your Christmas budget. It is better to overestimate than to underestimate.

Share the Budget With the Family
Budgeting is a family affair. Even a well-prepared, well-intentioned budget can fail if no one cooperates. Inform the family about the budget and make sure they understand, so that they don’t make any unnecessary purchases when trying to save money.

Start Saving
There are simple ways to minimize expenses, and saving a little each month can really add up when the holidays come around. Several examples are skipping that dessert course while eating out, packing lunches for the kids, and renting a DVD instead of going to the theater.

Keep Records
To keep track of expenses, write them down. This allows you to identify losses and inappropriate spending. In addition, list the names of the persons whom you will be giving gifts and how much you will spend. If the budget becomes too tight, change the amount you have allotted for the gift.

Determine Whether You Will Pay Cash or Credit
Paying with cash gives you the advantage of not going over your budget; but credit cards can provide you discounts and paper trails. Decide what you want to use and stick to one credit card if you go for credit. Review your transactions so that you do not go over the limit. Always pay on time.

Be at Ease with Your Spending Plans
Some people are stressed by financial planning because of the limitations imposed on their spending. This should not be the case. The budget gives you a spending plan so that you will not be overwhelmed during the Christmas season. By sticking to your budget and being comfortable with it, you will be able to celebrate Christmas without worrying about overspending and debts.

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