Category: Personal Finance (Page 1 of 6)

Healthcare Costs: The Wild Card

Healthcare Costs: The Wild Card

I know you’ve probably read a million posts on this topic lately since the future of healthcare in the United States is so uncertain, but healthcare is a big topic in the preparation for retirement, so let’s look at our situation:

Retirement Healthcare Cost Estimates

A recent Fidelity analysis estimates that healthcare will cost $275,000 per couple. This estimate only includes ages 65-88 at the latest. That averages out to $11,957 a year! Say you retire at 40 and live until 100 and spend the same amount of money annually, you’re looking at a whopping estimate of $717,420! Do I think this is reality? No idea. The answer is that we have LITERALLY NO IDEA what healthcare will look like in the United States until we die. That makes planning for it in calculations really, really hard.

Healthcare Matters

It’s my theory that by 35 or 40 everyone has some weird health thing they have to deal with. Health is up there with money in the “Don’t Talk About in Public” list of topics in our society. We need to talk about it. In our house, I’m the sick one. In February, doctors finally figured out that I have Supercolon (pretty cool diagnosis, amiright?). Basically, this means that I have one of the longest, twistiest colons of all time. Food gets caught in the folds and ferments and that leads to bloating. Painful, “are you pregnant?,” can’t stand up or walk type of bloating. I am lucky that I don’t have to put on work clothes and sit at a desk every day pretending I’m fine when I’m not. In fact, on one work trip, I couldn’t even make it 3 days sitting at a desk. I had to duck out early and go work from my hotel bed. Many, many people don’t have that option. They are stuck at work with any number of terrible symptoms and have to pretend they are fine.

When we talk about health insurance, sure we’re talking about the people that “did this to themselves,” but more importantly (and WAY more abundantly), we’re talking about your friends and relatives and co-workers that are struggling with IBS, fibromyalgia, cancer, supercolon, etc. When we talk about healthcare, we’re also talking about the family that just lost their daughter to juvenile cancer and now are faced with hundreds of thousands of dollars of healthcare bills. Instead of having time to grieve, they have to buck up and figure out how to bail themselves out financially from their daughter’s death.

Estimating Our Family’s Healthcare Costs

If Mr. T leaves his job (or gets laid-off), we would be out of his sweet, sweet employer-based healthcare plan and be left to fend for ourselves out in the uncertain healthcare world. Alaska is one of the 5 states that only has one insurer on the health insurance exchange. We also have 3 kids to cover. According to the Kaiser Family Foundation’s insurance marketplace calculator, in the current Obamacare environment, we’re looking at $36,584 for a silver plan without subsidies. If the subsidies also remain, that plan would cost us $3,000-$11,000 per year for our family depending on income ($11,000 with current income, $3,000 if we cut our income in half). Also, keep in mind these are just insurance costs. Actual out-of-pocket healthcare costs will be added on top of this!

Now, if Obamacare goes away, we could be on the hook for that full $36,584. Even worse, we could have to start worrying about whether or not we could get insurance at all depending on what pre-existing conditions we have by then (supercolon? check. Others? undetermined).

Healthcare in Later Years

Now, adding to all that uncertainty is the uncertainty of healthcare as old people. Sure, the kids will be on their own for healthcare by that point, but Mr. T and I will be aging and that raises costs significantly. The future is so uncertain!

Honestly, healthcare is one of the main reasons Mr. T is sticking with his job. Leaving with 3 kids and having to navigate the uncertain healthcare waters with dependent children scares us. If this was no longer a fear, I think we would be working toward him leaving his job a whole lot sooner!

Coming Wednesday: Ways to Save Money on Healthcare now.

What are your healthcare calculations for the future?

Why is Personal Capital Free? The Catch!

Why is Personal Capital Free? The Catch!

I’m sure you’ve seen a number of these already, but here’s my Personal Capital Review. If you’re interested, you can sign up for Personal Capital here.

Why is Personal Capital Free?

Let’s start with the bad. Personal Capital is free because they want to actively manage your money (don’t let them!). When I signed up for Personal Capital over a year ago, the sidebar showed me a picture of a banker under the caption “Your Advisor.” Since then, they’ve heated up the hard-sell a bit more. I now get emails that say things like: “You’re not on track for retirement! Call your advisor today!” When I log in, I often have to click out of a pop-up showing me my advisor and asking me to give him a call. This is all annoying. And things may get worse (who knows?).

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A Financial Plan is Like a Sneeze While Driving

A Financial Plan is Like a Sneeze While Driving

Have you ever had to sneeze while driving? It’s terrifying! You’ll have to close your eyes and convulse your body* all while maintaining safety on the road. Having a financial plan is very similar to preparing for this unexpected, horrifying sneeze.

Preparing to Sneeze While Driving

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Why Are We Afraid of Boring?

Why Are We Afraid of Boring?

Everyone lives their lives trying to not be boring. They don’t want to live like everyone else. They don’t want to seem average. People prove they’re not boring by buying nice houses, interesting cars, fashionable clothes. “I couldn’t possibly be boring. Just LOOK at me!” In this cycle of trying to prove we’re not boring, we also expect boring answers to be wrong.

The Boring Answers are the Best Ones

People want shortcuts. They want to hear the anecdotes and not the research. Everyone wants to be in shape and everyone wants to be rich. Why do you think the weight loss and financial industries are so large? We want a pill or a get-rich scheme. Do you know how to get in shape? You exercise. You actually work the muscles you want to be strong. Do you know how to get rich? You save money. You let money grow by not touching it.

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What's Stopping You From Cutting That Budget Line Item?

What’s Stopping You From Cutting That Budget Line Item?

I am a big fan of making sure I get value from my money. Each month as I look over the month’s spending, I look at where I can improve and where I can optimize and where I’m happy with my spend. Each budget line item should have a purpose. So often, we get stuck with ones that don’t, so why do we avoid cutting them?

Things Change, So Should Your Spending

We used to cloth diaper, but with health problems after Lui’s birth, we stopped. Paying for diapers¬†was worth the expense.

This week, we returned from a 2-week vacation to visit the kids’ cousins in Nebraska and Texas and I realized diapers are no longer worth the line item on our budget. Lui’s 3 now and is ready.

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Comparison is the Thief of Joy and Productivity

Comparison is the Thief of Joy and Productivity

Teddy Roosevelt is famous for saying: “Comparison is the Thief of Joy.” I took the liberty of adding “… and productivity.” When we compare ourselves to others, we lose sight of what we’re busy accomplishing.

Lin-Manuel Miranda is Better Than You

Last week, a Facebook friend of mine posted:

Lin-Manuel Miranda and my alumni magazine make me feel like I’ve done nothing with my life.

I totally agreed. A few days later, I happened across this article (headline is NOT changed): Lin-Manuel Miranda even sings karaoke better than you do.* Of course he does!

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Tracking Your Finances and Celebrating Wins!

Tracking Your Finances and Celebrating Wins!

If you’ve been around Northern Expenditure awhile, you’re probably aware that I like to celebrate. (If you follow me on Twitter, you’re aware I celebrate with dancing gifs!) If you don’t track, you can’t celebrate!

Tracking Your Finances:

It’s a new year (yay for new!) and it’s time to start tracking your finances FOR REAL this year. Here’s what you need:

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It's Time to Face Your Financial Reality

It’s Time to Face Your Financial Reality

Last week, in celebration of Halloween, I shared a tweetstorm of the scariest things you could say to a Personal Finance Geek. Maybe you read that and felt bad about yourself because you have done some of those things (or still do). DON’T. I shared the original tweets. What I did not share were all of the conversations that followed. SEVERAL of these tweets inspired responses from other personal finance bloggers that said things like “Me 2 years ago,” “…said my husband,” “been there!” or “still paying off that debt!”

We are not better than you. And you are not worse.

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Scariest thing to say to a personal finance geek

Scariest Things to Say to a Personal Finance Geek

In the spirit of this spooky Halloween holiday, I made a list of the scariest things you could say to a personal finance geek. Then I opened it up on Twitter:

The response was overwhelming. I immediately threw out my own list since all of them were covered. So, turn on the creepy Halloween music and prepare yourself for a Twitter storm of the scariest things you could say to a personal finance geek (ordered by category).

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If I had and how to spend my life insurance

If I had… & How to Spend My Life Insurance

Periodically, I like to run through what I would do with a windfall. Tomorrow is PFD Day and we’ll be receiving $5,110 overnight. In celebration, here’s what I would currently do:

If I Had $5,000

(Or $5,110) in this scenario. In case you forgot, we tithe 10% of all increase. So, our PFD amount left after that is $4,599. With this money, we will be putting $1,600 extra toward our mortgage (on top of the extra $1500 we’ve been putting toward it the past few months) bringing our mortgage balance under $60,000 (I’m already looking forward to the October Plan Update!). The other $3,000 will go toward my Roth IRA which I hope to max out with the other $2,500 by the end of the year.

If I Had $10,000

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