Keep a level head when it comes to investing in the stock market

Keep a level head when it comes to investing in the stock market
Eileen St. Pierre, The Everyday Financial Planner

rollercoaster rideEven for those of us who teach others about investing, it has been gut-wrenching to watch the recent turbulence in the stock market. Just when you think stocks can’t go down again, they do. But I have not panicked – and that’s the last thing you should do too.

When you panic and sell all your stock, you realize any losses.

If you keep a level head and don’t sell, the losses are just on paper. They still hurt, I know. But stocks will bounce back. I lost even more money in the stock market when the housing market collapsed in 2008, but I recovered all that money and have since made a lot more.

If you get out of the stock market entirely, you will miss out on the upturn when stocks rebound.

After the housing market collapsed, many investors said they were leaving stocks for good. So when the stock market rebounded, they did not reap any of those returns. When these investors finally did return to the stock market, they were too late to the party. They ended up buying stocks at much higher prices. They bought high and sold low – this is the opposite of what you are supposed to do!

A decline in stock prices represents a great buying opportunity.

All the financial pundits are saying the stock market was due for a correction. Think of this as a great big sale on stocks. So now is a good time to invest more in stocks, not less. I guarantee you Warren Buffet would give you the same advice.

The bottom line is stick to your long-term financial plan. Every once in a while we need a stock market correction to test our discipline. Will you pass this test?

Free Tax Filing Options

Free Tax Filing Options
Eileen St. Pierre, the Everyday Financial Planner

The 2017 tax filing season begins on January 29 and runs through April 17. Last year, over 51 million taxpayers prepared and e-filed their federal tax returns themselves. Kudos to them! Even if you do not plan on doing your taxes yourself, you need to be aware of your tax filing options. For many, you can get your taxes done for free if you qualify for certain programs.

The VITA Program

For those with an Adjusted Gross Income (AGI) of $54,000 or less, you can get your taxes done for free at a VITA (Volunteer Income Tax Assistance) site. IRS-certified volunteers provide free basic income tax return preparation with electronic filing. Some sites offer assistance in Spanish and other languages. The IRS also has the Tax Counseling for the Elderly (TCE) Program that offers free tax help to taxpayers who are 60 and older. To find a VITA or TCE site in your community, use the IRS VITA/TCE Locator Tool or call 1-800-906-9887.

The Free File Program    

If your AGI is under $66,000, free software is provided by the members of the Free File Alliance, a consortium of 12 tax preparatory firms including H&R Block and Turbo Tax. You don’t actually download the software. Instead, you are linked securely to their site. Then the software takes you step-by-step through the process, building your return for you based on your answers to specific questions.

If you qualify for this program, choose a provider from the list that also offers free e-filing of your state return. Too confusing? The IRS has a neat wizard tool that will help you find providers.

If your AGI is above $66,000, you can DIY with free online fillable forms and then e-file for free. However, this system does not support state tax returns and only does basic calculations.

The United Way

The United Way has partnered with H&R Block to offer a free service MyFreeTaxes for those with an AGI below $66,000. This includes both federal and state return filing. When you are transferred to H&R Block, make sure the MyFreeTaxes logo is in the upper left-hand corner after you log in.

Be aware of tax identity theft.

E-filing has also become popular with identity thieves. They use stolen Social Security numbers and other information to file fake returns and collect the refund that was supposed to go to you. Taxpayers don’t realize they are victims until they try to file their taxes and find out someone else has already claimed their refund. For this reason, legislation requires the IRS to hold refunds of those taxpayers claiming the Earned Income Credit and the Additional Child Tax Credit until February 15.

Remember that the new tax bill recently passed by Congress does not affect 2017 returns.

Help – I overused my credit cards for Christmas presents!

Help – I overused my credit cards for Christmas presents!
Eileen St. Pierre, The Everyday Financial Planner

On January 1, all the commercials started for products designed to help us with our New Year’s resolutions: weight loss programs, nicotine gum, gym equipment, dating services, and credit monitoring products. If you overspent on Christmas presents, you do not need to shell out any more money to help you get back on track. You just need to attack the problem with the same determination you had when shopping for the best online deal on your kid’s video game.

Write down everything you owe on one sheet of paper.

This may sound like a no-brainer, but you would be surprised how many people don’t fully realize how much they have spent. List each credit card with its balance, credit limit, minimum monthly payment, and interest rate. Then write down all the money you have left over each month to devote to paying off your credit card bills. Be honest here – if you don’t have much left over you need to find ways to cut your expenses. Check out my posts Ten ways to save at least $10 a week and Which Bill Should I Pay First? if you need help.

Here are two strategies to employ to help you tackle your credit card balances:

Strategy 1: The Snowball Effect

This is referred to as an accelerated debt payoff strategy. My post The Snowball Effect on Debt provides a simple example on how to use this strategy to pay down debts. It starts by paying off the lowest balance credit card first. Then add the money freed up after that debt is paid off to your next credit card. Keep repeating until all your credit cards are paid off. The key to this strategy is setting aside a fixed amount of money in your monthly budget to devote to paying off your debts.

Like most financial advisors, I highly recommend this strategy. But for some of my clients, this strategy has not worked. They tend to focus way too much on their credit scores, cannot devote a fixed amount to paying off their debts, and have too many credit cards. Here is an alternative strategy.

Strategy 2: Focus on Your Credit Utilization Ratio

For each credit card, divide your balance by your credit limit. The result is your utilization ratio, which comprises about 30% of your credit score. Identify all credit cards that have a utilization ratio greater than 30%. Pay enough on these credit cards to get the utilization ratio below 30%. Just pay the minimum on the other credit cards.  Repeat each month, focusing on continuously lowering your utilization ratio.

  • This strategy may take longer than the Snowball Effect so if you have additional money to put towards your credit card balances, please do so.
  • Stop using all credit cards; otherwise you will never pay them off.
  • Keep making all your payments on time. Remember, your payment history has an even larger impact on your credit score than your utilization ratio.

I know a lot of people intend to employ another strategy to pay off their credit cards – use their tax refund check. The problem with this approach is that it does little to curb the behavior that got you into this mess in the first place. Instead, open up a savings account with your tax refund check for next Christmas!

How will the new tax bill affect me?

How will the new tax bill affect me?
Eileen St. Pierre, The Everyday Financial Planner

The new tax bill,The Tax Cuts and Jobs Act, exceeds 500 pages. While the cut in the corporate tax rate is permanent, cuts to individual tax rates are temporary. They expire in 8 years at the end of 2025. This means your taxes will go up in 2026 if these cuts are not made permanent.

Here are a few of the major changes:

  • The standard deduction will increase to $12,000 for singles and $24,000 for married couples filing jointly. It’s estimated that 94% of us will be better off taking the standard deduction than itemizing. That should make filing your taxes much simpler for those who no longer have to fill out Schedule A.
  • Personal exemptions are eliminated. Taxpayers currently subtract $4,150 from income for each person claimed. This may hurt families. The increase in the standard deduction may not be enough to offset this. This feature of the bill was not advertised very much to the public.
  • The child tax credit will double to $2,000 per child. Up to $1,400 of the total credit will be refundable for low income taxpayers – refundable means you get this amount of the credit back even if you do not owe any taxes.
  • Starting in 2019, those paying alimony will not be able to deduct these payments. However, those receiving alimony will no longer be taxed on these payments.
  • Except for the military, you will no longer be able to deduct moving expenses.
  • Your deduction for property, state and local income taxes is capped at $10,000.
  • The penalty for not having health insurance (i.e., the Obamacare mandate) will be repealed in 2019. The entire Affordable Care Act was not repealed – just the mandate.

The law goes into effect next year so it will not change the amount of any tax refund you may receive when you file your 2017 taxes early next year. But you will see a little more money in your paychecks in January when the new tax rates start.

Re-Released: Bewildered by Bitcoins

Re-Released: Bewildered by Bitcoins
Eileen St. Pierre, The Everyday Financial Planner

Over the past two weeks, I have been asked quite a few questions about bitcoin now that the price has risen to such dramatic levels (as of the writing of this post, the price for one bitcoin just hit $19,000). Futures trading in bitcoin will start on the CBOE December 11 and the CME December 18. Even though this Forbes article describes six reasons futures trading in bitcoin is better than buying bitcoin outright, I do worry about wide-eyed individual investors getting in over their heads. They may be out of their league with professional investors – speculators – waiting to take advantage of them.

Futures contracts are marked to market every day.

This means that every trading day, your gain or loss is realized. If the price of a bitcoin drops dramatically, which it has been known to do even in a single day, you can lose big time. If you do not have enough money in your margin account to cover this drop, you will get a margin call. This is different from the stock or options market, where paper losses are not realized until you sell the stock or options.

On January 20, 2014, I published this post about bitcoin. It is still relevant today so I decided to re-release it:

You may have heard some of the stories about bitcoins, like the British man scouring the dump for his discarded laptop when he realized the bitcoins stored on it were now worth $9 million. Introduced in January 2009, bitcoins are a form of digital currency that is used primarily over the internet, but some brick-and-mortar stores are now starting to accept them. An excellent column written by Raghu Kumar explains bitcoins in layman’s terms.

[3/25/14 Update: IRS announces bitcoins will be treated as property, not currency.]

To put it quite simply, I am bewildered by bitcoins.

Bitcoins fluctuate wildly in price.

According to LocalBitcoins.com, on 1/17/14 the cheapest bitcoin purchased online (via a Western Union money transfer), costs $810.29. If I want to purchase a bitcoin locally with cash, the cost really varies. In my home state of Oklahoma, a bitcoin currently costs:

  • $923.01 in Edmond
  • $877.83 in Oklahoma City
  • $873.84 in Tulsa

It costs 14% more to purchase a bitcoin in Edmond than to purchase it online. If I am going to purchase something that costs that much money, why would I use a form of payment that varies so much in price?

bitcoin-coins

Buyer Beware.

Proponents argue there are lower transactions costs with bitcoins since sellers do not have to pay the typical 2-3% transaction fee for credit cards. As a buyer, I have some concerns:

  • What happens if my bitcoins are lost or stolen?
  • There are government regulations protecting consumers who use credit cards. These protections do not exist in the Bitcoin network.
  • What recourse do I have if the transaction goes bad?

Some people may say that using bitcoins is just like using PayPal but without a physical company serving as the middleman in the transaction. There is no Bitcoin company – it is simply a network of users. There is no toll-free number to call if you have a problem. There is no asset or entity backing the bitcoin.

Remember what happened when the mortgage market collapsed.

When markets run smoothly, everybody is happy and no one is complaining. But in times of trouble, there’s comfort in knowing there is an institution, whether it be a government agency or corporation, to help us out.

In the time it took to write this column, the prices of bitcoins on LocalBitcoins.com changed quite a bit. Now the cheapest bitcoin purchased online costs $784.90. The same seller in Edmond lowered his/her price to $918.83. Perhaps in the future we will all be asking ourselves how we could live without the bitcoin. But for now I’ll stay bewildered by bitcoins.

Tax Breaks for Those with Recent Hurricane Damage

Tax Breaks for Those with Recent Hurricane Damage
Eileen St. Pierre, The Everyday Financial Planner

A friend of mine whose home suffered damage as a result of Hurricane Harvey recently asked me if there were any tax breaks to help her out. I thought I would share with you the information I passed on to her. Congress actually agreed on something and passed legislation at the end of September giving some tax relief to the victims of Hurricanes Harvey, Irma, and Maria.

Victims of these hurricanes can deduct most of their casualty losses even if they do not itemize.

Normally, you had to do the following to deduct casualty losses:

  • First subtract out $100 per casualty.
  • Then you could only deduct net casualty losses that exceed 10% of your Adjusted Gross Income (AGI).
  • You needed to itemize your expenses on Schedule A. Those who took the standard deduction were not allowed to increase it.

With the new legislation,

  • You first need to subtract out $500 per casualty.
  • You can then deduct all of the net casualty loss if you suffered damage that was not covered by insurance in these hurricane zones.
  • If your net casualty loss exceeds the cost of the property plus improvements or adjustments, you can only deduct the cost of the property plus improvements.
  • If you do not itemize, you can add your losses to your standard deduction amount.
  • More information is contained in IRS Publication 584.

You can carry back the loss to 2016 to get your refund faster.

If you live in a federally-declared disaster area, you do not have to wait until you file your 2017 return to get a refund. You are allowed to file an amended return (IRS Form 1040X) for the year before the loss occurred. Just remember you cannot file an amended return electronically.

You can use your retirement funds without penalty to help pay for losses.

The 10% early withdrawal penalty is waived if you are a victim of Hurricanes Harvey, Irma, and Maria – normally you have to wait until age 59 ½ to withdraw without penalty. They also are allowing “greater flexibility” in borrowing from your retirement accounts so I would check with your retirement account provider on what this means in practical terms.

I do not recommend you use your retirement funds, whether it is a straight withdrawal or a loan, to pay for hurricane damages. This money is for your retirement. Having to pay back a 401(k) loan or replenish money you have withdrawn can really set your retirement funding plan back. For many, they were already behind to start with!

Year End Financial To-Do List

Year End Financial To-Do List
Eileen St. Pierre, The Everyday Financial Planner

Let’s get our finances in order before the year ends. Here’s a financial to-do list:

  1. Establish a holiday budget. Determine the total amount you can afford to spend on gifts.  List everyone on your gift list with a price range next to each person.
  2. Track your holiday bills. If you use your credit cards a bit too freely, transfer the amount of your budget into a savings account – just withdraw the cash when you go shopping.
  3. Keep a little extra savings on hand. Unexpected expenses always crop up during the holidays so it’s good to have a financial cushion.
  4. Update your W-4 if you’ve had any changes in your family during the year. This form tells your employer how much money to deduct from your paycheck for income taxes.
  5. Use the remaining money in your FSA for eligible health care expenses or lose it at the end of the year. Your company may offer a grace period up to 2½ months to use the money or allow carryovers up to $500 next year.
  6. Pay yourself first. You can contribute up to $18,000 to your 401(k) by 12/31/17. You have until 4/17/18 to contribute up to $5,500 to a Traditional or Roth IRA. Those who are age 50 and older can make additional catch-up contributions.
  7. Make your charitable contributions, especially if you itemize on Schedule A.

Santa-Claus-Children-Gift-List

 

 

Round 1: Signing up for TrumpCare

Round 1: Signing up for TrumpCare
Eileen St. Pierre, The Everyday Financial Planner

More than twice as many people signed up on the first day of this year’s open enrollment period for individual health insurance policies on the Marketplace than last year. That’s after the Trump administration drastically cut the advertising and support budget. Looks like the word got out anyway.

Remember, the open enrollment period has been shortened to just 45 days – ending on December 15. I had no problems signing up this year. I could have completed the process in about 20 minutes but I wanted to spend a few days thinking about how my husband and I planned to use our health insurance in 2018. Hopefully others will follow our example.

sign-to-good-health-road-83363452We do not expect any major health care expenses.

After having major surgery in December 2016 and January 2017, along with all the follow-up visits, I’ve seen enough of hospitals. I even got my first colonoscopy in this year since I had already met my out-of-pocket limit. So we decided to choose a plan with the lowest premium, not necessarily the lowest out-of-pocket maximum.

We picked a plan that has fewer doctors in network.

This was a big change for us. We wanted to spend a few days mulling this over. We had always chosen a Blue Preferred plan because our local hospital and doctors were in that network. But next year we are opting for a Blue Advantage plan – most of our local providers do not belong to this network. Here is our rationale:

  • With our advanced premium tax credit (APTC), our monthly premiums would be $0. We’d have to spend over $5,000 on health care at these providers for this strategy not to pay off.
  • We did not have to use all of our APTC. Since we plan on making more money in 2018 than we did in 2016 (on which the APTC is based), we expect to have to pay back some of the APTC. By using less of the APTC, there is less to pay back.
  • We travel a lot, and we know some of the places we plan on travelling to in 2018 have providers in the Blue Advantage network.

For those who qualify, monthly subsidies have risen dramatically.

Because the Trump administration cut off cost-sharing reduction payments to insurers, insurers raised monthly premiums on Silver plans to offset this. The Affordable Care Act requires the APTC (subsidies) to rise accordingly. Most who qualify for these subsidies will be able to find policies that have very low or $0 monthly premiums.

Those who make too much money to qualify for subsidies are the ones who will pay much higher premiums next year. Weren’t these the people the president promised to protect?

Open Enrollment for TrumpCare Begins Wednesday – 6 Things to Know

Open Enrollment for TrumpCare Begins Wednesday – 6 Things to Know
Eileen St. Pierre, The Everyday Financial Planner

I, like many other Americans, wait with bated breath to see how much I will be paying for health insurance next year. Being self-employed, my husband and I have purchased our individual policies in the Marketplace (the federal health insurance exchange) for the past four years. Open enrollment begins this Wednesday, November 1.

Here are 6 things to know:

  1. The open enrollment period will be cut in half – just 45 days. After December 15, you’re out of luck.
  2. Funding has been drastically cut for advertising (over 90%) and help (the budget for Navigators was cut 41%). The website HealthCare.gov will even shut down on Sundays (except December 10) during open enrollment from midnight to noon.
  3. It took a while, but you can now preview prices at HealthCare.gov.
  4. There has been a lot of publicity surrounding the tax credit and cost sharing payments. If you get a tax credit to offset your premiums, the monthly amount you have to pay may not go up at all. That’s because the tax credit rises when insurers raise premiums. You will still get the tax credit – that’s written in the law. However, those who do not qualify for the tax credit will have to pay higher premiums.
  5. The cost sharing reductions that the president has stopped paying help offset out-of-pocket payments for some consumers. Those who qualified for these reductions are in silver plans. Insurers still have to provide these reductions to those who qualify – they just won’t be reimbursed by the federal government. Insurers have increased the cost of silver plans in 2018 in anticipation of this. Those who are not eligible for cost-sharing may even find that the gold plans in their areas are comparable in price to silver plans.
  6. The IRS has publicly stated that it is still enforcing the penalty for not having health insurance. The cost of going without health insurance in 2018 is the same as 2017 – the greater of 2.5% of AGI or a flat rate of $695 per adult, up to $2,085 for a family.

As I have been doing every year, I’ll let you know how everything goes for us during open enrollment.

Have health insurance quetions?

Ten Ways to Respond to the Equifax Data Breach

Ten Ways to Respond to the Equifax Data Breach
Eileen St. Pierre, The Everyday Financial Planner

It was quite shocking to hear that almost half of the U.S. population had their personal information compromised in the Equifax data breach. If there is a silver lining to all of this, it’s that it forced us all to take better measures to protect ourselves from identity theft. Here are ten ways to do so:

  1. Determine if you were one of those impacted by the Equifax breach by going to www.equifaxsecurity2017.com. The company is offering free credit monitoring for those who were, but I have heard mixed guidance on whether it is a good idea to take it.
  2. You can monitor your credit easily by pulling your credit report at www.annualcreditreport.com. By law, you can access your report every 12 months for free from each of the three credit reporting bureaus (Equifax, Experian, and TransUnion). Pull it from one bureau every 4 months to check your credit throughout the year.
  3. Get a free credit score and watch it for any big changes. Your bank or credit card company may provide your credit score on your monthly statement. Do not feel pressured to pay for credit monitoring.
  4. Check to see if your bank or credit card company offers free credit alerts.
  5. You can freeze your credit to prevent identity thieves from opening new accounts in your name. You may have to pay a fee to each of the 3 credit bureaus, and another fee to each one to lift the freeze. This will not prevent thieves from impersonating you to commit other crimes such as insurance fraud.
  6. Avoid clicking on and responding to unexpected or suspicious emails. They could be from identity thieves phishing for your information pretending to be your lender, creditor, or a government entity. Always call the organization directly to verify they sent the email.
  7. Keep your account profile up-to-date with all the companies you conduct business with so they can contact you if they detect suspicious activity on your account.
  8. Update your passwords – do not use the same password for all accounts. There is a reason companies ask you to make them hard to guess.
  9. Bookmark this page – www.identitytheft.gov. Not only is it the site you need to go to when you are a victim of identity theft, but it contains links to resources to help you prevent identity theft in the first place.
  10. Watch out for dumpster divers! Shred all documents that contain your personal information. If you are not sure, shred it anyway. If you don’t have a shredder, add it to your Christmas list.

Want to learn more? Join us for a free 30 minute webinar on Identity Theft December 14 at 3:30 Central sponsored by the Choctaw Asset Building Program. Click HERE to register.

Ten Financial Observations from My 50th Birthday Road Trip

Ten Financial Observations from My 50th Birthday Road Trip
Eileen St. Pierre, The Everyday Financial Planner

My husband and I just returned from one of our road trips – 10 states in 25 days. For my 50th birthday, I wanted to see where Lewis & Clark ended their journey (I have never been to the Northwest) and visit some national parks. I thought I would share with you a few financial observations we made along the way.

  1. You have no choice – you must get full service gas in Oregon (this is also true in New Jersey). State law does not allow customers to touch the gas pumps.
  2. We saw more foreigners at the national parks we visited than Americans. We made this same observation several years ago when we visited the Grand Canyon.
  3. If you put a convenience store in the middle of nowhere, people will find it.
  4. Hotels really need to have more than one washing machine and dryer available, especially if they are frequented by foreign tour groups.
  5. In-N-Out Burger always has a crowd, but no one was at the McDonald’s across the street.
  6. It’s too hot in Death Valley to have a park ranger man the payment booth so they have self-service kiosks set up. We paid our fee but most people do not.
  7. As my husband and I drove along the Las Vegas strip, we thought about all the employees it takes to run a casino and how big their electric bill must be – you know, the typical stuff tourists think about.
  8. We paid nothing for our hotel rooms. We had lots of reward points saved up.
  9. There is no sales tax in Oregon – boy, I could get used to that! The residents told us their property taxes are pretty high though.
  10. In a week after we returned, this was in my mailbox:AARP

Free Webinar: Annuities

Free Webinar: Annuities
Eileen St. Pierre, The Everyday Financial Planner

Annuities promise a guaranteed income for the rest of your life. This can sound too good to be true. Annuities have a lot of costs associated with them that can hurt your retirement if you do not understand them. Join us for this free 30-minute webinar on Thursday, October 19 at 3:30 Central to learn about these investments and how they can fit into your retirement plan. We will also discuss alternatives to investing in annuities. This webinar is sponsored by the Choctaw Asset Building Program.

Click HERE to register.

Getting Financially Ready to Buy a House

Getting Financially Ready to Buy a House
Eileen St. Pierre, The Everyday Financial Planner

family-in-front-of-house-600x330Buying a home is a big financial step. A home can be a great way to build wealth. But I have never heard anyone tell me that they look forward to the mortgage application process. If you take the time to get your financial house in order, it can really help alleviate the stress of taking out a mortgage.

Here are some tips to get you financially ready to buy a house.

Determine how much house you can afford.

The general rule of thumb is 2 to 3 years’ of income. If you have student loans or other major debts, you may want to look for a home on the low end of this range.

Another rule of thumb is to put 20% down to avoid paying private mortgage insurance (PMI) and to secure a better interest rate. However, this can be a high hurdle for many, and there are mortgage programs out there that do not require that high of a down payment. Just remember, the more you put down, the more “skin” you have in the game, and the lower the interest rate on your mortgage loan.

Google “mortgage calculator” to find many free sites that will show you what your mortgage payment will be given the following inputs:

Set up a special savings account just for your down payment.

Label the account something like “House Down Payment” so you will always see this when looking at your account. Set up automatic withdrawals to this account when you get paid. For example, if you need to accumulate $9,600 ($7,000 down payment plus a little extra for all the other expenses that come with buying a home), a couple should set up the following automatic payments:

  • To reach their savings goal in 1 year, each should contribute $400/month.
  • To reach their savings goal in 2 years, each should contribute $200/month.
  • If they get any income tax refunds, they should put some of the money into this account to help them achieve this goal faster.

Get your credit in tip-top shape.

Here is a checklist of things to do:

  • Get your credit report at www.annualcreditreport.com. Everyone is entitled to get a free copy of their credit reports from each of the three credit reporting agencies (Experian, Equifax, and Transunion) every twelve months. Checking your credit yourself is a soft inquiry and will not hurt your credit score.
  • Make sure there are no errors on the credit reports. Take steps to remove errors (follow directions on screen). Make sure all credit accounts are in good standing.
  • Find out your credit score. There are a number of ways to get free credit scores now. Check at your bank or on your credit card statement. The higher your credit score, the lower the interest rate you will get on your mortgage.
  • Don’t take out any loans (i.e., new car) six months leading up to applying for a mortgage. Too many hard credit inquiries will hurt your credit score.
  • Do some “browsing” for a new home. But when you are ready to buy, try to get pre-approved for a mortgage first. This will make it easier to jump on the house you want if the real estate market gets tight and puts you in a better negotiating position.

Don’t forget about the other costs of home ownership.

Your mortgage payment should not exceed 20 to 30% of your gross income before taxes. Try to shoot for the lower end of this range, because there are other costs to home ownership such as:

  • Homeowners insurance
  • Maintenance
  • Property taxes
  • Furniture

Costs can add up quickly if you are not careful.

Want to learn more? Join me for a free 30-minute webinar Buying a House without a Credit History on November 16 at 3:30 CST. Click HERE to register.

Health Care Waste: The Walker Nobody Wants

Health Care Waste: The Walker Nobody Wants
Eileen St. Pierre, The Everyday Financial Planner

While I was recovering in the hospital last December from major spine surgery, a medical equipment representative paid my husband Jeff a visit in my room. I was completely out of it – I had no idea he was there. He showed Jeff all this equipment that he said would greatly aid me in my recovery. Jeff was like “I don’t know what she is going to need.” Most of the stuff was complete overkill that Jeff could probably fashion himself out of stuff around the house. Jeff settled on just getting me a walker because the representative gave him paperwork showing it would be 100% covered by my health insurance.

Walker_Front1The hospital is in on this.

The medical equipment provider was somehow connected with the hospital. The scariest part for me was that this representative had all my information when he came to visit my room. He had all the paperwork ready for my husband to sign. What if Jeff wasn’t there? I was in no condition to give consent.

I guess if we had to do it all over again, we should have just told him no and we’d contact him later if we needed anything. But my husband was put in a rough position and this representative knew it. Do you know that many medical equipment providers now let you rent equipment? It would have save us a lot of grief knowing this.

The walker was not 100% covered.

The first bill I received after I was discharged was for this stupid walker. My insurance company was billed $195.97 (our invoice said it would cost $185.42). It was reduced down to $110.87 and the insurance company paid $88.70. We had to pay $22.17. Yeah, this annoyed the hell out of us but we read the fine print and realized we got screwed. We decided to pay it because I had to go in for a follow-up surgery in January and I did not know if I would need it. It turned out I never needed it. It’s still in its original packaging.

Now we can’t get rid of it.

We tried returning it even though the 30-day window had passed. The representative from the office that originally sold us the walker just laughed at my husband. A rep from another office (same company) was a lot nicer but could not help us. We asked independent medical equipment companies across Oklahoma if they would buy it from us – all we wanted was to recover our $22.17. One offered us $10. All the others said they could not help us.

We tried selling it on eBay, but there are competitors who are selling theirs for less than it costs us to ship it. Not sure how they can afford to do that, but that’s probably another scam I really don’t want to find out about. Now we have it listed on Craig’s List. We’d even be willing to just donate it to someone who really needs it.

For those who really need the walker, Medicare and supplemental insurance covers the full cost. Why buy mine for $22.17? Just get it from that nice representative who takes the time to visit you in the hospital.

It’s all waste.

The cycle just keeps continuing. And I don’t expect Congress to do anything to end it anytime soon. One suggestion would be to give Medicare permission to purchase medical equipment from eBay and Craig’s List. They’d save us taxpayers a whole lot of money.

CFPB Disaster Financial Toolkit

CFPB Disaster Financial Toolkit
Eileen St. Pierre, The Everyday Financial Planner

As I am writing this post, my family and friends in Florida are preparing for Hurricane Irma. Family and friends in Houston and Beaumont are cleaning up after Hurricane Harvey. Recently I received an email from the Consumer Financial Protection Bureau (CFPB) about their Hurricane Harvey Financial Toolkit. It contains some great information on securing your finances and your home after a natural disaster – from hurricanes, to tornadoes in my neck of the woods, to wildfires out west.

hurricaneThe CFPB provides direct links to resources you will need immediately after the disaster. They then list five steps to do next:

  1. Contact your insurance company. Ask for an electronic copy of your policy—receiving physical mail may be difficult. That will help you verify your coverage. If possible, take photos and videos of your damaged property. Documenting damage will help you with your insurance claim.
  2. Register for assistance. Registering online at www.DisasterAssistance.gov is the quickest way to register for FEMA assistance. If you are unable to access the internet, you can also call at 1-800-621-3362.
  3. Contact your mortgage servicer. Talk to your mortgage lender right away and tell them about your situation. Damage to your home does not eliminate your responsibility to pay your mortgage, however your lender may be willing to work with you given the circumstances.
  4. Contact your credit card companies and other lenders. If your income is interrupted or your expenses go up, and you don’t think you will be able to pay your credit cards or other loans, be sure to contact your lenders as soon as possible. Ask your creditor to work with you.
  5. Contact your utility companies. If your home is damaged to the point you can’t live in it, ask the utility companies to suspend your service. This could help free up money in your budget for other expenses.

The CFPB also provides other great resources and ways to avoid scams. No need for me to reinvent the wheel here, folks. This website has it all in one place.