Ways to Keep Your Medical Expenses in Check

Medical expenses have gone crazy. You don’t have to do the same.

In the United States, healthcare has grown into a $3 trillion industry. That’s $3,000,000,000,000. That’s a lot of zeros—so many that for most of us, the number doesn’t even seem real. But if we break it down to a personal level, that means the average American spends more than $11,000 per year on healthcare costs. If that doesn’t sound troublesome, consider the fact that the annual cost of healthcare for a family of four tops $28,000. With the median household income coming in at $63,000 per year, that means the average U.S. family can wind up spending more than 40% of their annual income on medical-related expenses.

Even with employer-provided health insurance, which covers roughly 56% of the US population, the employee contribution and out-of-pocket deductibles can leave families buried under an avalanche of medical debt. It’s hard to understand how an industry responsible for personal care can seem so unconcerned when it comes to the financial state of its patients. But with a growing number of hospitals being operated as investor-owned, for-profit businesses, return on investment often seems more important than compassionate patient care.

Difficult Times Call for Creative Approaches

As medical bills continue to climb, the corresponding rise in medical collection agencies only perpetuates the healthcare industry’s callous reputation. In a conversation about the cold, impersonal nature of medical collections, Elizabeth Rosenthal, author of An American Sickness, observed, “…to them [collection agencies], a bill is a bill is a bill. They don’t care if it’s for somebody’s heart transplant…or if someone spent a lot more money on a Rolex watch that they couldn’t afford.”

Over the last few years, medical bills have become the number one cause of bankruptcy in the United States. With that in mind, it should come as no surprise that GoFundMe campaigns have become one of the most popular ways for consumers to cover their medical costs. According to GoFundMe statistics, approximately 250,000 fundraising campaigns are established on the platform every year just to pay for medical expenses. The $650,000 generated by those campaigns points to a significant problem in the healthcare system.

If you’re one of the thousands of Americans struggling to keep your head above water as medical bills flood in, you might feel helpless. And while there are no magic solutions that can make legitimate medical debt disappear, there are a few steps you can take to stay afloat.

3 Ways to Keep Your Medical Expenses in Check

1. Review Your Bill
When hospital or doctor bills show up, it’s natural to skip right to the “Total Due.” This is not necessarily the best way to approach the statement. Glancing at the amount due could leave you feeling helpless, confused, and overwhelmed. Before you send any money, take time to review every line item listed. Due to complex medical billing codes, it’s not uncommon for incorrect or duplicate charges to wind up on the bill. If you notice discrepancies or questionable entries, it is your right as a consumer to ask your insurance company or medical provider for an explanation. The dispute process may be lengthy, but it’s better than paying for medical services you never received.

2. Consider a High-Deductible HSA
If you and your family are in relatively good health, a Health Savings Account (HSA) can be an excellent way to secure medical coverage while keeping your insurance premium under control. Traditionally available through employers, insurance companies, and some financial institutions, HSAs allow you to set aside money from your paycheck to be used specifically for medical expenses. These accounts feature higher deductibles than traditional insurance plans, but they make up for that by allowing account holders to deposit funds on a pre-tax basis, which can provide some savings and stress relief.

3. Create an Emergency Fund
Setting aside $1,000 in a savings account is a smart way to protect yourself against life’s unpredictable twists and turns. Minor illness and occasional doctor’s visits certainly qualify as unexpected expenses, so an emergency fund can help you address sudden medical needs without derailing your budget. If you decide to follow the previous suggestion and secure a high-deductible Health Savings Account, you may want to boost your emergency fund to a level that would cover your deductible. While this adjustment will likely take more work to establish, knowing you’re able to cover your entire deductible in the event of a medical emergency provides enough peace of mind to make it worth the effort.

The steps we’ve outlined may not solve all your problems or eliminate all your medical debt, but they can go a long way toward helping you feel like you have a little more control. If you need a little help in between – check our Financial Helper Loan, small personal loans that can help cover the costs of life’s necessary expenses.

*APR = Annual Percentage Rate. Rates are subject to change. Maximum loan is $25K and maximum term is 60 months. Not all applicants qualify, subject to credit approval. A First Financial membership is required to obtain a personal loan, and is open to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. See credit union for details. Federally insured by NCUA.

5 Bad Money Habits to Break Today

When it comes to money, we all have some bad habits from time to time. Sometimes they’re learned early in life, and sometimes they’re picked up along the way. Here are 5 habits that you should kick ASAP.

1. Buying snacks at work

Getting hungry in the afternoon is totally normal. But if you find yourself feeding quarters into a vending machine or swiping your card at the convenience store every afternoon, you may have an issue. Just spending a couple dollars a day can really add up over the course of the year. You can probably buy the same snacks at the grocery store for a fraction of the price, and in larger quantity. And that’s without coupons. So next time you get that 2:30pm hunger pain, jot down a note to hit up your favorite grocer on the way home.

2. Making impulse buys

Whenever some people see something they like, they just have to have it. By taking time to think it over, you may eventually decide it wasn’t a wise purchase. Sometimes, all you need is a few minutes to let it simmer in your brain to realize it’s not worth it. Try out a “waiting period” next time you get the impulse to buy something, and see what happens.

3. Not saving money

We probably all started saving later than we should have – whether it’s for retirement, an emergency fund, or just a fun rainy day fund. If you save money first, and then budget the rest when you get a paycheck, you probably won’t even miss that money.

4. Carrying credit card balances

If you have a credit card you’ve probably heard about the evils of using it. While it can get out of control for some people, it can also be a valuable tool for others. If you regularly use your credit card, you’ve most likely carried a balance on occasion. Anyone who’s ever done this realizes how bad credit card interest can really be. Paying off credit card debt can take decades for some people. Don’t get trapped.

5. Paying big bucks for cable

There are plenty of other alternatives out there for entertainment. Cable can become very costly and sometimes that’s not your top priority in terms of bills. Netflix and Hulu provide hundreds of movies and TV shows at much lower rates. Do a price comparison and decide what’s best for your budget.

Article source: John Pettit for CUInsight

Changing Jobs? Check Your Finances First

Are you considering a job change? If so, it is important to approach your job change with careful consideration.

Not only will a new role involve learning new skills, working with new people, and establishing a new routine, it will also require significant financial planning — at least in the transition period.

So, how can you set yourself up for success while transitioning to a new endeavor? By making sure your finances are in order.

 

5 Financial Tips to Remember When Considering a Job Change

Check your savings. If you already have another job lined up, your savings may only need to tie you over until your new paychecks start coming in. This might sound like a minor concern, but depending on the payroll schedule for your former company and your new employer, it’s entirely possible you could go a month or more between paychecks. If you’re leaving your job without another already lined up, you’ll need enough savings to cover expenses until you accept your next job offer. If you have the luxury of transitioning on your own time frame, aim to have several months’ worth of expenses in a savings account.

Trim your expenses. Admittedly, cutting expenses is never a fun topic of conversation. However, operating on a leaner budget (at least for a little while), can make your career transition far less stressful. So, before accepting a new job offer, take time to review your monthly budget and see if there are any belt-tightening adjustments you can make. Cut back on morning lattes, meal prep at home instead of buying lunch at a restaurant every day, or binge a Netflix series instead of going to a movie at the theater. You’ll be surprised how quickly little savings add up — and those savings can help you bridge the financial gap between jobs.

Review the compensation package. It’s natural to look at a job’s salary when trying to determine whether it’s a better opportunity. This is a good place to start, but there’s more to it than that. Does the prospective employer pay an hourly wage, salary, or combination of base plus commission? Do they cover a portion of employee insurance costs? Is the new employer’s paid time off plan equivalent to the one you’d be giving up? What about holidays? Be sure to compare the entire compensation package instead of just comparing the annual salary.

Account for relocation costs. If your new job will require you to relocate, it’s always a smart idea to look at the cost of living in your new location. A $10,000 per year raise is nice, but if you’re going to spend an additional $15,000 in housing expenses each year, the new job could cause you to fall behind financially. If you need help comparing living expenses, cost of living calculators can be extremely helpful. State income tax rates can be another location-dependent variable worth considering.

Don’t leave money behind. If your current employer offers a 401K or other retirement savings accounts, be sure to make arrangements to take those funds with you. This might seem like a no-brainer, but the fact that orphaned 401K accounts total an estimated $1 trillion – indicates it’s easier to overlook than you might think. When it comes to these employer-sponsored retirement plans, employees have three options when changing jobs: 1. Roll over funds to a 401K plan with the new employer, 2. Roll over the funds into an Individual Retirement Account (IRA), or 3. Withdraw the funds. It’s worth noting, however, that withdrawing the money usually incurs a steep penalty. To determine the best approach for your money, it’s always best to consult with a financial advisor. If you need a good place to start, check out the Investment and Retirement Center at First Financial.*

If you’re currently contemplating a job offer or thinking about what it would take for you to make a change, spend a little time crunching numbers. You can also contact your local credit union, and if you live, work, worship, attend school or volunteer in Monmouth or Ocean Counties in NJ – one of the financial representatives at First Financial FCU would be happy to help you make a financial plan. We can help you analyze your current finances, identify the best retirement rollover plans, and find ways to maximize your money in order to make your job change as smooth as possible.

*Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

5 Simple Steps to Stop Overspending

You probably have the best intentions when it comes to saving money. With all the temptations out there, it can be hard to keep your finances in line. Splurging here and there every once in awhile is okay – but the habit of overspending can become a much bigger problem if you don’t keep things in check. Check out these five steps to stop overspending, before it gets out of hand.

Understand Your Triggers

Overspending is often caused by impulse shopping. When you’re out shopping, do the small items in the checkout aisle get you? Do you always pick something up while waiting at the checkout line, even though you don’t actually need anything? Ask yourself why. It’s important to understand what your triggers are. Do you spend because it gives you a thrill or because you’re bored and have nothing else to do while waiting in line? Understanding exactly why you overspend will help you get to the root of the problem and find lasting and realistic solutions.

Track Your Budget

The most important thing you can do to stop overspending is to actually have a budget and track your expenses. It’s not enough to just have a rough idea of how much you’re spending. You need to know exactly where your money is going and what you’re spending on everything. Start logging expenses in the budget whenever you buy something or pay a bill. At the end of the month, sit down and analyze your spending habits. You might be surprised at what you find out, and even more surprised when you realize you can cut a lot out without feeling much of a sacrifice.

Learn to Say No

Overspending has a lot to do with social pressures. Sometimes it’s just really hard to say no. You might be trying to keep up with the Joneses, or maybe your friends are just constantly asking you to go out. Think about your priorities before you agree to anything. Is the decision going to hurt your finances and should you really be making that commitment? Learning to say no is a big part of being financially responsible. The sooner you learn what you can and can’t afford, the closer you will be to financial independence.

Live Within Your Means

Here’s a simple thing you can do to improve your finances: don’t spend more than you have. Getting into the habit of spending every paycheck is dangerous even if you never get into debt, because emergencies do happen and you will need savings to fall back on. It’s even worse if you overspend and fall into debt to make purchases. Once you owe money, you not only have to pay for what you buy, but you also need to pay interest on what you owe – effectively making your paycheck smaller for the foreseeable future. Learn to live within your means. It’s certainly not easy at the beginning, but scaling back little by little will set you up for long term success.

Allow Small Rewards

Personal finance is serious business, and most of the time it may not seem very fun. That doesn’t mean you can’t enjoy yourself in the process though. Don’t forget to budget for a “YOU” fund. Allow yourself small rewards from your paycheck. Just make sure the “YOU” fund doesn’t cause you to go over your budget.

Article Source: Connie Mei for moneyning.com

4 Tips to Keep Your Money Goals on Track this Year

Even if you feel you’re doing pretty well with your finances, you could probably stand to make a few changes to your financial habits. If you’d like to stay a little more on track with your money this year, here are a few things to consider …

Be cautious with credit: A credit card can be a valuable tool, but if it’s abused, it can quickly create a mountain of debt. Try to only use your credit card for purchases you will pay off each month. Credit cards can be a great way to improve a credit score, but always make sure you’re being careful when paying with plastic.

Be on the lookout for savings:  It doesn’t matter what you’re buying, you can probably find it cheaper somewhere else. Have you looked online? You’ll probably find exactly what you’re looking for on the internet, and usually for less. If you don’t feel like waiting for something to be shipped, see if the store will price match your online price. If shipping isn’t free – see if you can order online and ship to your local store to pick up, which is usually always free.

Stop forgetting to pay bills: Have you mapped out your monthly bills and their due dates? If you’re not a very organized person, it may be time to design an auto pay schedule that will keep you from missing any payments this year. Paying your bills on time is must if you want to keep your credit score up.

Embrace frugality: No matter how much money you make, you should always try to spend less than you want to. You’ll be glad you filled up that savings account when an emergency arises.

Article Source: John Pettit for CUInsight.com

3 Things You Should Do With Extra Money ASAP

According to a recent report by CareerBuilder, 78% of Americans who work full-time live paycheck to paycheck. Thinking about the long term is hard, especially when it comes to finances, but life does get easier the earlier you start laying the foundation for good financial habits. Whether you have $100 or $1000 to spare every month, investing extra funds wisely can have a significant impact on your financial future.

1. Pay Off Your Debt

First and foremost, consider putting part or all of your extra income every month toward paying off your debt. Being in any kind of debt can definitely loom heavily over your life and finances. Instead of spending any extra cash, it’s smart to chip away at that mountain to become debt-free. You should start with your highest interest debt first and work your way down, though some people find more motivation to tackle their debt by focusing on paying the smaller debts first.

2. Put it in Your Emergency Fund

Having an emergency fund is not just a smart idea, it’s a necessity. Life is unexpected and you never know what can happen. Having an emergency fund can help you in life’s hardest situations, such as a car accident or the loss of a job. Begin putting money toward an emergency fund, any little bit helps. It’s ideal to have six months of expenses saved up just in case.

3. Invest in Your Retirement

After you’ve paid off your debt and put money in your emergency fund, it’s now time to think about the future – which means retirement. While it’s still years or maybe decades away, saving for retirement as early as possible means you reap more rewards later. And that can start with a 401k. Surprisingly, many full-time workers are unaware that their employers may match up to a percentage of your contribution to the company’s 401k plan. Find out what your company’s policy is and get started with contributing to your retirement as soon as possible.

A Roth IRA is another popular retirement savings account that allows your money to grow tax-free. When you’re ready to withdraw at retirement, you do not pay taxes on these funds. If you’re under the age of 50, the most you can contribute to a Roth IRA is $5,500 yearly. This basically means that those who have earned income, can put in just over $458 monthly to reap the most benefits in their retirement future.

If you have extra income at the end of every month, start with these three steps. It will set up a healthy financial foundation for you and your family. Going forward if you still have money leftover after that, you might want to start looking into investments or perhaps spending a bit on yourself.

Need help with retirement planning? To set up a complimentary consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your savings goals, email Mary.Laferriere@cunamutual.com or stop in to see us!*

*Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Non-deposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

Article Source: Connie Mei for moneyning.com