I’ve Paid For This Twice Already…

Frugal living and debt reduction tips for a better financial future. This is one family’s story.

Archive for the ‘plan’ Category

Cost Effective Housing Options For Veterans

Tuesday, January 21st, 2014

Living frugally is dependent on the way consumers are able to extract benefits from economic situations. Veterans are dependent on federal incentives to manage their fiscal routines. However, specific finance options are also available for veterans and they can be used for financial security.

Two financial authorities are particularly relevant to veterans: Veterans Administration (VA) and Federal Housing Administration (FHA). A recent reform paper on Housing Finance System analyzes the market since the recession and also looks at how legislative reforms have affected investors. The report highlights the role of financing through the Department of Veteran Affairs and mortgage backed securities from the FHA.

A congressional report on Veterans and Homelessness indicates that property acquisition within the community is a tough task and there is a need for better usage of incentives to manage financial affairs.

Veterans should therefore keep tabs on schemes and grants such as the 2014 FHA grant program, which was recently announced. Through this program, veterans can apply for government based incentives with regard to property ownership.

Two important incentives within the program are the Returning Veterans Grant Program and the Veterans Purchase Grant Program. Both grants are in excess of $7,000 and can serve as a viable financing option. The grant program is applicable to both serving and qualified veterans. The only thing to be checked is the income guideline, which is used as a yardstick to determine the amount of the grant.

With multiple options available for home buying and home loan options for veterans, there is a need for streamlining the incentives. The comparison should be made with respect to individual financial conditions and the kind of incentive that would be most rewarding.

Comparison of VA and FHA

Advocates of sustainable living is utilizing the best finance options. While both the VA and FHA facilitate property ownership, there is a need to make a cost benefit analysis.

The first thing to understand is that interest rates have been at historic lows in the last couple of years. This means that the market is conducive for buying, and both FHA and VA are able to provide mortgages/loans for veterans at lesser rate than general institutions. However, VA has a higher benefit rate, a fact highlighted by Lowvarates.com.

Another point is that VA loans need no down payment as opposed to FHA, where it is mandatory. Furthermore, the loan approval procedure is far less taxing owing to its specific nature.

Another factor is that VA loans are distributed through private entities, making the process competitive and cost friendly. Private entities would offer even further low rates. With low interest rates, benefits of VA are compounded greatly.

This is owing to the fact that VA is reserved for veterans and there are options to offer lesser rates than even FHA. The FHA, while being extensive, has to cater to other communities within the U.S. as well.

It is still true that home ownership is a tough ask within today’s economy. However, using appropriate routes such as VA programs, the process can be made easier and the fiscal situation of veterans can improve over the years.

This is a guest post by Katherine! Kat is an avid finance reader and aspiring blogger. Katherine’s usual writing topics are on her own personal finances and you can read more of her post on Veterans at Military Bases Blog!

Staying Afloat Financially in Times of Crisis

Thursday, June 6th, 2013

While it is easy to keep a budget and save when things go according to plan, injury and illness quickly wreak havoc on even the most well-maintained finances. Medical bills balloon out of control easily. And, if injury or illness is severe enough, time off work may be necessary. If you cannot work to maintain a paycheck as you recover, medical bills and day to day living expenses may grow to an unmanageable amount rapidly.

Emergency Fund

Though it is never easy, maintaining sound financial footing in times of crisis is possible. You will need to create an adequate savings throughout your life to safeguard against unexpected expenses. While it hurts to draw funds from your retirement savings on unanticipated expenses, having an emergency account to pull from in times of crisis helps avoid incurring heavy debts.

Social Security

You pay into social security with the intention of getting paid upon retirement. However, if you become injured or mentally ill, you may be able to claim your social security benefits early. Approval for SSDI and SSI claims vary on a case by case basis, but generally you need to prove the existence of an impairment, either physical or mental, that prevents you from working.

Life Insurance

Like Social Security, some life insurance policies will pay out in the case of traumatic injury. Check and update your life insurance policy to ensure that you are covered in case the unthinkable occurs.

Workers Compensation

If you experience injury on the job, you might be entitled to Worker’s Compensation. Worker’s comp insurance provides wage replacement in the event that an on the job injury prevents you from continuing to work.

Secondary & Supplemental Insurance

Primary healthcare insurance will cover a large portion of your medical bills, however secondary insurance companies like Aflac also provide insurance money to pay for cost of living expenses like food, rent, and utilities in the event that you are temporarily out of work due to injury. If you participate in high risk hobbies like skiing or motorcycle riding, carrying supplemental insurance can keep you afloat should you incur a severe break or knee injury.

Negotiate Bills

While medical bills easily grow out of control, most hospitals have payment programs and grants to help those who cannot pay out of pocket beyond their insurance coverage. Before condemning yourself to a lifetime of medical debt, call the hospital bursar to see if arrangements may be made to pay over time or if costs may be reduced.

Do negotiate your bill ahead of surgery if possible, or at least promptly once an invoice arrives. Late fees can easily double and triple your medical cost if bills are not resolved in a timely fashion.

Once your invoice arrives, be sure to check it for accuracy. You may be able to reduce your out of pocket costs by making certain your are not overcharged for procedures and that your medical coverages has been appropriately applied.

If the unthinkable happens and you become unexpectedly injured or ill, take care to exercise all of your financial options. Quick response and research of your financial options give you the opportunity to keep your financial situation up right even during trying times. The sooner you address your financial challenges the less likely you are to incur penalties or find yourself under water.

Take proactive steps to insure that you keep your finances in check. If you find yourself struggling to understand terms or procedures, enlist the help of a professional to help you stay on course.

At Least Some Expenses You Can Plan For

Wednesday, January 16th, 2008

Last Thursday I went to the dentist, and I got the news I knew I would, but with more finality than I expected.

I have to have my wisdom teeth out.

My mouth is… not small, and my wisdom teeth were never impacted and fit in there just fine. So I hadn’t had them out as a teenager like many people do. My last dentist had made noises about me getting them out because one of them wasn’t quite fully erupted, but he didn’t explain more than that. (I’ve since decided, after starting with our new dentist, that the last dentist wasn’t the best of dentists). We just got dental insurance in August 2007, so now we go to a different dentist and this was my first appointment with him. They did a lot more things than the last dentist did, including measuring my gums compared to my teeth, and determined that my gums are slightly receding – which could be a problem but might not turn out to be, so that’s a wait and see thing as I go to this dentist regularly and he sees if they continue to recede or if they’re just like that normally. But around my wisdom teeth, especially the not quite fully erupted one, my gums are receding a lot, and if left unchecked, I’ll not only lose my wisdom teeth but the molars next to them too.

Well of course, I don’t want that to happen. So out come the wisdom teeth.

The bad news is – my dental insurance doesn’t cover oral surgery. They claim my medical insurance should cover it. Well, my medical insurance has an exception in their policy for oral surgery such as wisdom teeth removal. They don’t cover it. The dentist says they’ll submit the charges to both and see what happens but honestly, I am not holding my breath. Our health insurance is generally good but they are very picky about things and my dental insurance is pretty useless for more than cleanings and x-rays. So I am about 98% sure I will be paying out of pocket for this procedure.

$382 per tooth. Plus $50 for the medicine to make me not feel it.

So… I have a $1600 expense looming. I can’t do it right now but I also can’t wait too long. The dentist would prefer I have them out in February but I am going to wait until September. Our Flexible Spending Account for medical expenses, for some reason, runs August 1st – July 31st instead of Jan 1st – Dec 31st like most peoples. We also have a fairly low cap we can put it in each year ($750) which I also don’t understand, but oh well. The company my spouse works for was talking about raising that limit for next year so we are going to look into that, but if they don’t, this is my plan to get the teeth out without going into further debt:

  • Use all of the money in the FSA for 2008-2009 for the procedure. That should leave about $900 left for us to pay out of pocket. We did this for hospital expenses for both my pregnancies so we know we are okay without the FSA to dip into all year.
  • Save $2000 in our emergency fund between now and September instead of $1000 so I can use the difference to pay for the procedure.

No, this is not an “emergency” because I know about it, the saving it in the emergency fund is just a convenience feature so I don’t have to set up a new account to save for the dentist. I intend to start saving $150/month towards this in March, which means I would save $1050 by September when I have the procedure. Maybe my spouse’s FSA will go up in August and we’ll be able to use more of that towards it and less out of savings. That’d be great news.

I’m thankful I can at least plan for this. I got the news about the teeth in the midst of the car repair drama and I needed to just let it sit in my head and process for a while before I could formulate a plan. Sometimes too many things hit at once. But now, I have a plan.

Bye bye wisdom teeth. Well, 9 months from now, and without further added to our debt total if all goes according to plan. :) My spouse has his 6 month checkup tomorrow… hopefully no more bad news.  (Update:  not only does he get to keep his wisdom teeth, he didn’t have so much as a cavity.  ;) )

Update on Finding New Income

Saturday, November 10th, 2007

So, it has been a week and a bit, and I have spent hours a day searching online for new work-from-home employment opportunities. I have been looking basically in three sectors:

  • Legal document coding: what I was doing before, basically.
  • Data Entry: Pretty straightforward and I have experience in it through the document coding
  • Tutoring: I have a PhD in Genetics and I have tutored in the past so I thought this might be an avenue to explore.

I have really gotten nowhere with the document coding and data entry avenues. There just isn’t work out there available right now. Maybe ever. From some research I think a lot of this type of work is being outsourced – I found a number of companies I could apply to if I was located in India. Really. I did put applications in at a few places but none of them were currently hiring in the US, I was just added to their database of available applicants in case something opens up.

Tutoring however, I have made a little progress with. After some back and forth with one company I got approved to take their subject exams to proceed with my application. They have a list of all their exams, and the ones they actually need more tutors for are marked. You can take any exam (or all the exams) but to proceed with the application you need to pass at least one that they need a tutor in right now. Well, all the easy ones were not needed (middle school grade level) but they had a number of high school courses still open. I chose algebra, thinking I would ace it no problem…. and well… it was a disaster. Apparently I have forgotten more math than I ever thought I knew. Heh. So, I didn’t pass that and can retake it in 90 days. With a lot of refreshing on my part! Heh. Funnily enough, I did pass social studies (which I was so not expecting because um… I’m a scientist not a social historian) which they need tutors in so I can officially move on to the next step in the application.

I am going to brush up on my chemistry and geometry over the weekend (other classes they need tutors for) and try those subject exams before I proceed to the next step. But it is nice to have one under my belt that they need tutors in. I also took a few of the middle school exams to get my confidence back after Algebra crushed me and passed 4th-6th grade math and 6th-8th grade science. I’m afraid to take 7th-8th grade math after the algebra disaster. Heh. They don’t need tutors for those right now though, but maybe they will in the future.

So things are looking promising in that arena. If I can get onboard as an online tutor that should help the income out a bit. I need to submit a writing sample, so I need to figure out which post here is my best writing, heh. I write endlessly so no need to write a new thing I think! (All suggestions welcome by the way ;) )

I also have been working at optimizing the advertising on the blog – not adding more specifically but just getting the most out of what is there. I think I may be starting another blog too. Not specifically for income but to have another place to talk about the parenting aspect of my life specifically. Income doesn’t hurt though ;) .

Things are moving forward. Even my spouse is pleased and he is a pessimistic bird at heart.

Extra Paycheck Strategy

Wednesday, September 26th, 2007

As I said this morning, November will be a three paycheck month for my spouse. He is paid biweekly which means that two months out of the year, he gets paid three times instead of the normal two. In the past, that money has somehow gotten frittered away on things, the winter one on Christmas related stuff and the summer one on, well, who knows what. This time it is different. I have a plan and a strategy and I am hoping it works.

First off, I need to let go of the idea that it is completely an “extra” paycheck. Although none of our bills are based upon using it, our everyday expenses (gasoline and food primarily) will continue to go on, and a portion of every paycheck is earmarked for the two weeks of expenses it is supposed to cover. I think one of the problems I’ve had in the past is I was a bit too ambitious – I saw the money as “extra” money completely and then when I needed to use some of it just to pay for groceries or gasoline or other “normal” expenses in that two week period, I got discouraged. I used to be an “all or nothing” type of thinker, and so if some was being used, might as well just use it all and try again with the next “extra” paycheck. Not this time.

Basically, after taxes, 401K, health insurance, etc is taken out, my spouse’s “take-home” paycheck every two week is around $1350. I am splitting that into three parts. The first part is the “$350″ part. That is going to be snowflaked directly to the credit card debt. Boom!

The remaining $1000 will be all put into our emergency fund savings account. However it has two purposes. $500 of it is for Christmas presents and other Christmas-related expenses that can’t be absorbed into our budget (mostly travel, we travel by car about 2000 miles round trip over the course of the Christmas holiday to be with family). The other $500 is reserved for paying any “normal” budgetary expenses that come up if needed (hoping not to have to touch that at all). At the end of December (when all Christmas-related stuff is done and paid for) anything remaining from this original $1000 will be snowflaked directly to debt. Even if it is only $1.75. Hopefully it will be considerably more than that. I am waiting until after Christmas for the entire amount in case my $500 for Christmas turns up being not enough and I need to use part of that other $500 for that. We usually spend more than that on Christmas all told but I am hopeful.

If I do have to dip into the emergency fund in October (still hoping for not), bringing the emergency fund back up to $1000 will be the first priority with any leftover funds, and then the remainder from that will be snowflaked to debt.

The only question that remains is which paycheck I treat as the “extra” one. I am going with paycheck #1. That means that we’ll have to get to November 16th (paycheck #2) to pay most of the monthly bills, which should work out okay. But if we are in a significant shortfall situation in October as may be the case, I can change this and paycheck #2 will become the “extra” one. As long as I decide before November actually starts it should be okay either way. Treating paycheck #1 as the “extra” one just works better for adjusting in future months since the first paycheck will come closer to the middle of the month then and slowly adjust back towards the beginning.

So I have a plan. Have I thought of everything? I hope so.

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