Quality health insurance consistently ranks as the most desired employee benefit. According to the Harvard Business Review, 88 percent of employees ranked employee health insurance as a the top employee benefit consideration. Which makes sense considering that you canât put a price on a clean bill of health. Whether covered by an employer, or shopping… Read More
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Medicare is a federal health insurance program widely used by U.S. citizens and permanent residents age 65 and older. The program also applies to those younger than age 65 who have disabilities, end-stage renal disease (ESRD) or other diseases. But … Continue reading →
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Whether you are acquiring it through your employer or on your own, shopping for health insurance coverage is a task that many adults will be faced with at some point. Health coverage is not a one-size-fits all amenity, and it comes in many forms such as Point of Service (POS), Health Maintenance Organizations (HMOs), Preferred […]
Questions to Ask When Shopping for Health Insurance is a post from Pocket Your Dollars.
Healthcare expenses can take a huge chunk out of any familyâs budget so I want to break down how a family can weigh the pros and cons of a traditional health plan vs a high deductible one. Health Insurance Getting…
The post How to Choose the Best Healthcare Plan for Your Budget appeared first on MintLife Blog.
Millions of Americans faced pay cuts as the coronavirus pandemic affected industries. While many workers were laid off, some were furloughed, and others kept their jobs but at lower salaries as businesses struggled to stay afloat. Some workers are reexamining their budgets to cut some of their expenses until they get another job or their […]
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Since it doesnât have an immediate benefit â like health or auto insurance â life insurance may be the most underestimated insurance type there is. But if you die, life insurance will likely be the single most important policy type youâve ever purchased. And thatâs why you have to get it right. Not only do […]
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At some point, most people experience an unexpected crisis that shakes their financial world. It could be losing a job, receiving a huge medical bill, or having a car break down at the worst possible time. But surviving a pandemic is a situation you probably never thought you would face.
No matter what challenge you’re facing, you’re not the first.
Along with the public health toll, the COVID crisis has put millions of people out of work. For those struggling financially, here are eight critical rules to help you manage money wisely, stretch your resources, and bounce back from this unprecedented health and economic disaster.
8 rules for managing a financial hardship
Here are the details about each rule to manage a financial setback during the coronavirus crisis.
Rule #1: Accept your situation and use your resources to seek help
The key to successfully navigating a financial setback is to be realistic. If you’re in denial and don’t face money troubles head-on, you can quickly compound the damage.
Instead of focusing on the problem, getting angry, or letting stress overwhelm you, channel your emotions into finding solutions. Start talking about your challenges with people and professionals you trust, such as a money-savvy family member, financial advisor, legitimate credit counselor, or an attorney.
Instead of focusing on the problem, getting angry, or letting stress overwhelm you, channel your emotions into finding solutions.
The following financial associations have certified volunteers who can offer free help and advice:
National Association of Personal Financial Advisors
The Financial Planning Association
Association for Financial Counseling & Planning Education
Rule #2: Get a bird’s eye view of your finances
To fully understand your situation, create a list of what you own and owe; this is called a net worth statement. Compiling your data in one place helps you evaluate your financial resources, make decisions more efficiently, and have essential information at your fingertips if creditors or advisors ask for it.
First, list your assets:
Then list your liabilities:
Credit card debt
Include the estimated values of your assets, the balances on your debts, and the interest rates you pay for each liability. You could jot down this information on paper, enter it in a computer spreadsheet, or create a report using money management software.
When you subtract your total liabilities from your total assets, you’ve calculated your net worth, which is an indicator of your financial health. It’s not uncommon to have a low or negative net worth when you’re in financial trouble.
RELATED: 10 Things Student Loan Borrowers Should Know About Coronavirus Relief
Rule #3: Understand your cash flow
An essential part of bouncing back from a financial crisis is keeping an eye on your monthly income and expenses. Create a cash flow statement that lists your expected income and typical expenses, such as rent, utilities, food, prescriptions, transportation, and insurance. Again, you can create this report manually or by using budgeting features in a financial program.
Understanding where your money goes is the only way to prioritize expenses and cut all non-essential spending.
Understanding where your money goes is the only way to prioritize expenses and cut all non-essential spending. Making temporary sacrifices will help you recover as quickly as possible with less long-term damage to your finances.
Rule #4: Shop your essential expenses
As you review your spending, it’s an excellent time to comparison-shop your essential expenses. Evaluate your highest costs first, such as housing, vehicles, and insurance, since they offer the most significant potential savings.
For instance, you may be able to move into a less expensive home, purchase or lease a cheaper vehicle, and shop your auto insurance to find better deals. Ask your utility provider about assistance programs that offer energy-saving improvements at no charge.
Rule #5: Communicate with your creditors
If you haven’t been in contact with your creditors, start a dialog with each one immediately. You’ll come out ahead and get favorable treatment from creditors if you are proactive and honest about your financial troubles. Ask them for solutions, such as deferring payments for several months, setting up a reduced payment plan, or refinancing a loan to reduce your financial burden.
You’ll come out ahead and get favorable treatment from creditors if you are proactive and honest about your financial troubles.
Creditors are likely to ask about details regarding your financial situation, so have your net worth and cash flow statements on hand when you speak to them. Be ready to complete any required assistance applications quickly.
Rule #6: Prioritize your debts carefully
Based on guidance from creditors and finance professionals, prioritize your bills and debts carefully. Your goal should be to conserve as much cash as possible without skipping essential payments. Always pay for necessities first: food, prescription drugs, and auto insurance.
Debts related to child support and legal judgments have severe consequences and should be prioritized
Use your net worth statement to rank your liabilities from highest to lowest priority. For instance, debts related to child support and legal judgments have severe consequences and should be prioritized. Keeping up with an auto loan is a high priority if you rely on your vehicle for transportation. Federal student loans are in automatic forbearance through September 30, and the relief may get extended through 2020.
Your unsecured debts—medical bills, credit cards, and private student loans—are lower priorities. Never pay these debts ahead of rent, a mortgage, or utilities when you have a cash shortage.
Rule #7: Don’t let collectors force you to make bad decisions
Prioritizing your debts means some may be paid late or not at all. If a debt collector contacts you about a low-priority debt, such as a medical bill or credit card, don’t allow them to persuade you to pay it before your highest priority bills.
Collectors may try various aggressive tactics, such as threatening to sue you or ruin your credit. A lawsuit could take years, and a creditor is more likely to negotiate a settlement with you. Remember that a creditor or collector can’t send you to jail for civil debts.
If you are behind on bills, that fact is likely already reflected on your credit reports. By the time a collector contacts you, the damage is already done, and paying the bill won’t improve your credit in the short-term.
Rule #8: Take advantage of local and federal benefits
If your income and savings have entirely dried up, use these resources to learn more about local and federal benefits.
FeedingAmerica.org has a map showing local food banks
Supplemental Nutrition Assistance Program (SNAP) is the federal food program you may qualify for based on where you live, your income, and family size
MakingHomeAffordable.gov can help you find a housing counselor or see if your mortgage is backed by the federal government and qualifies for forbearance
Benefits.gov has a questionnaire that helps you discover the benefits you’re eligible for
Medicaid.gov is the federal health insurance program you may qualify for based on where you live, your income, and family size
Healthcare.gov is the federal health insurance marketplace where you may find plans with substantial subsidies if you earn too much to qualify for Medicaid
Financial challenges can cause you and your family to experience a flood of emotions, including anger, fear, and embarrassment. As difficult as it might be to put a financial crisis into perspective, it’s critical. No matter what challenge you’re facing, you’re not the first. There are millions of people who are dealing with COVID-related financial hardships.
Face the fact that your recovery could take a while. Do everything in your power to manage your budget wisely by getting organized, seeking ways to earn more, and spending less. Don’t be afraid to ask for help from creditors, seek free advice from professionals, and take advantage of every local and federal benefit possible.
Many health insurance shoppers will consider premium costs when purchasing health insurance. The full cost of a health planalso includes your out-of-pocket expenses, like the deductible, copays, and coinsurance. As important as it is that your health plan is affordableand that the monthly premiums fit into your budget, itâs also important to consider the value health insurance offers…. Read More
The post 4 Ways Health Insurance Can Save you Money appeared first on Credit.com.
A 55-year-old can expect to pay a long-term care insurance premium of $2,050 per year on average, according to a 2019 price index survey of leading insurers conducted by the American Association for Long-Term Care Insurance (AALTC). That will cover … Continue reading →
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