Budgeting for Your Health Care

One of the most difficult things, well, really two of the most difficult things in setting my monthly budget is

  1. Being able to predict the costs of the health expenses of my family for the month/year
  2. Not putting the right priority on including health care in my budget.

Both of these things together have resulted in getting blindsided every year with unexpected medical bills.

Perhaps blindsided isn’t the correct term. I actually kept my eyes closed to the possibility that someone in the family would need to go to the doctor/get sick or injured/have surgery. Then getting that bill after the insurance covered its bit was like having a cold washcloth slap me in the face when I am sound asleep. Not pleasant and it tends to piss me off.

It really pissed me off this year when my family’s medical/dental expenses were just below the allowed deductible and I ended up paying more for my federal income tax. How stupid is that.

All because I did not know how to plan.

After reading today’s post at Quinn’s Commentary, I realized he hit the nail on the head when it comes to planning for health care costs. Folks, it’s more than just paying for health insurance.

Here is that post….

I began managing health benefits in 1961. I have done everything from process claims, design and communicate health benefits, negotiate insurance and TPA contracts to serving on boards of directors of health plans and negotiating physician contracts. I am convinced of one thing with absolute certainty. From the perspective of virtually all Americans health care […]

via Any scheme we contrive will not make health care “affordable.” — QUINNSCOMMENTARY 😇 the facts about lots of stuff

The author links to this post INSURE AGAINST DISASTER, PAY FOR WANTS OUT OF POCKET, SAVE FOR THE END GAME which is another essential read, imho.

After reading these and the linked Forbes article, it is no wonder that unexpected costs of illness or injury leads too many of us to bankruptcy.

To avoid being caught unprepared this year,  I am including fully funding my HSA into my monthly expenses. And eating rice and beans all year.

 

 

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That Fresh Start is Not So Easy

Traveled to the state of my fresh start and I am finding that fresh start to be not so easy. I envisioned moving with no restrictions but soon found out that the reality is, I do have restrictions.

The major issue is trying to find a long-term rental that is in the area of 10/1 high-speed broadband Internet. This is a work requirement and non-negotiable. Plus, I am restricted from using satellite. Trying to find this in my preferred new locale proved impossible so now I have shifted a bit eastward. I have two calls out on potential rentals and am waiting for responses.

Hopefully, if either of these pan out, I hope my second restriction- that of having a cat- does not pose a problem. In my search for housing, I am amazed to find that many rentals do not allow either any pets, or, even more specifically, a cat. I do love the cat that my lovely daughter gifted me with (without my permission, may I add?) however, kittie is posing to be quite the restriction for my choice of rentals.

In my daughter’s defense, knowing that I was planning on moving, my daughter did say that, if I couldn’t find a place that allows pets, she would be happy to take the cat. However, said daughter is very busy going to vet school and working. She is really home only to eat and sleep.

The final restriction is needing a rental that is big enough to accommodate what has now ended up to be four adults. In addition to myself and my elderly mother, my sister and my disabled brother will be living with us. My sister and I will be the caretakers of Mom and bro, sharing responsibilities and providing each other respite when needed. So, while it does pose some challenges, the arrangement will be a good one.

Finally, and perhaps the most restrictive, is having to limit my search to rentals only because I have no money to purchase any properties that would meet my needs. While my intention is to live in a rental for the first year or two to get to know the area, I am finding that rentals are very, very scarce. Rentals that meet my needs are near-non-existent!

This is definitely proving to be a difficult start to my ‘new life’.

I Need to Figure Out How to Pay Less in Taxes

Obviously, by the debt load I carry, I am definitely not a financial wizard. And this year (and I am sure as a result of dumb decisions in the past) I made some stupid mistakes that resulted in my having to pay over a $1,000 to Uncle Sam on April 16th. That money would have come in handy for reducing my debt.

Arrghhh! Enough of this! Something needs to change.

I am taking time to examine my past mistakes with the goal of learning not to repeat them. Repeat after me- do not repeat them. And I am researching how to not only pay down my debt but also ways to lower my taxable income.

My annual gross pay is $66200. I will file as head of household in 2016 because I am not married, I will have paid more than half the cost of keeping up my home for the year and both my daughter and my mother can be a ‘qualifying person’. Only need one, though.

According to this table from taxfoundation.org , the estimate income tax brackets and rates for 2016 are:

2016 TAX BRACKETS
In 2015 I did not have enough deductions and credits to lower my taxable income to the 15% bracket. Over $8266 fell into the 25% tax bracket. I thought I had plenty of medical deductions but I did not have enough to exceed 10% of my adjusted gross income. Dang it. Thanks, Obamacare!

So, the goal is to work to bring my adjusted gross income down for 2016. How can I do that?

Off to research!

P.S. I realize I am divulging some pretty private info but, if it helps others learn and avoid making the same mistakes, it is all worth it.

Cash Only

Broke my beautiful budget plan because of poor planning. I budgeted $20 a day for food, fuel, household items and pet food.

But I did not go to the ATM and get $120 in cash on payday like I should have.Instead, I thought I could use  my debit card at the time of purchase and then track my spending with the spending tracker app.

Well, that doesn’t work for me. I blew my budget because I did not plan ahead.

I did not take the meat out of the freezer in time to thaw for dinner so we ended up eating take-out. Twice.

I did not stop at the gas station that offers a discount for paying cash on Tuesdays. So I ended up using my gas credit card to fill the tank.

I put on extra miles for an Easter gathering and to take my mother for appointments. That used an extra tank of gas.

I did not plan ahead for the Easter baskets so I ended up spending more money than I should to fill them.

The cat will need cat food and cat treats. Maybe it would be cheaper just to let her out to catch her own food!

I totally lost track of how much I spent in the last five days. Friday is payday and I WILL take  out the $120 in cash that I budgeted.

Finally Tracking Daily Spending

Spending TrackerI have a latent rebellious nature that likes to come out and sabotage some of my efforts to improve my life. One thing I have rebelled against is budgets and expense tracking. I hate it and I never do what I should do. And now I am sitting here mired in debt, wondering how the hell am I going to save the money I need to retire in 9 years?

Oh, what I do to myself!

Enough, I say. This weekend I sat down and put all I could on ‘auto-draft’, set up a budget and put an app on my phone to help me track my daily spending.

I am giving my household a $20 daily spending budget which includes groceries, gas and incidentals- actually, every thing that is not a bill.

So far, I am really liking that phone app Spending Tracker.  It’s free and easy.

Maybe this time I will stick with my budget.

 

 

If You’re Wondering Why You Can’t Make Ends Meet

living wage calculator
image courtesy of lifehacker.org

You might want to check out the Living Wage Calculator developed at MIT. This calculator gives you an idea of how much it costs to live in your area and, in case you’re planning a move, you can use it to decide where you can afford to live.

Another potential use is to decide just how much you really need to live on and, if you make more than that, sock the rest away for escaping the 9-5 rat race early!

The Living Wage Calculator sure shows that minimum wage is not a living wage.

I am reading Linda Tirado’s book Hand to Mouth: Living in Bootstrap America. It is opening my eyes to what it is like to try and live on minimum wage. It also makes me want to kick myself for accumulating so much debt on my more than ample income that I am forced to try to live on minimum wage.

If I could do it all over again, I would use this calculator to keep my spending to the level of the living wage and save the rest. The future would be much brighter.

 

I Will Not Commit

Ok, I will admit it. I am a very slow learner.

And I am very impulsive. I make rash decisions.

The combination of my slow learning and my impulsiveness have led me into a lot of trouble financially.

I need to stop making decisions. I need to stop and just think.

I think that a lot of my problem is the headfirst dive I take into the trapping of commitments.

I have trapped myself into apartment leases, cable subscriptions, Netflix and Amazon Prime subscriptions, cell phone contracts, iPhone leasing, credit card debt, and tuition payments. I also have a commitment to sponsor a child in Thailand at the tune of $38 per month.

Now that I finally realized this, I am making a commitment to no longer commit.

When my apartment lease is up, I am moving to a rental that will let me go month to month.

I cancelled my cable.

I am going to let my cell phone contract expire and I will find a much cheaper cell service that requires no commitment.

No further iPhone leasing.

No more charges to my credit cards. And that should translate into no more online ordering. Man, that is fast and dangerous!

Finish the tuition payments.

Cancel the Netflix and Amazon.

I will continue to sponsor the child because I do have a heart.

oh, yes, the internet. Unfortunately, I am committed to providing my own internet service so that I can have the honor of working for a multi-BILLION dollar company in this work at home position. Cheap bastard-corporation no longer provides the internet service.