Archive for June 2009

Health Insurance

Health insurance is a pit that makes money disappear.  I have seen that proven over and over.

However, I have seen that the LACK of health insurance is an even larger pit that not only makes money disappear, but many times it leads to bankruptcy or worse – a failure to diagnose a major health issue.

Health insurance is costly, but I wanted to share some tips that might help you save money as you acquire insurance or evaluate your current coverage.

  • Consider a High Deductible Health Plan.  An HDHP usually has a deductible of $2,500 or greater.  The insurance will not pay a dime for most items until the policy holder has paid an amount equal to the deductible.  After the deductible is reached, some plans pay 100% of the rest, other plans might require the policy holder to continue to pay a certain percentage.  Why is a HDHP good?  Because it is much cheaper because the policy holder has assumed more risk.  If you have a healthy family, a higher deductible can be a good risk to take because the deductible is not guaranteed to happen.  The premium is guaranteed to happen!
  • Purchase insurance with a Health Savings Account.  Health savings accounts allow one to save money on their health care expenses because the money can be used tax-free for healthcare-related expenses.  Think about it for a minute.  If a doctors appointment costs you $70 and you have to pay for it, it actually costs MORE than $70.  Why?  Because the $70 is AFTER you have paid payroll and income taxes.  You had to earn about $100 to net home $70.  If you have a HSA, you are able to use BEFORE TAX money which stretches your money about 30%!
  • Shop around.  There are a myriad of insurance plans available.  I personally shopped mine around on eHealthInsurance and with a local independent insurance agent.  I got a pretty good deal on a $5,000 Deductible Major Medical plan with a HSA.  After I spend $5,000 in the year, my insurance plan will pay 100% of the rest.
  • Compare GUARANTEED costs and MAXIMUM costs.  The premiums are guaranteed to happen.  Take the monthly cost and multiply it by 12 to obtain an annual cost.  Let's say a plan has a monthly cost of $250 and a deductible of $5,000 and the insurance will pay 100% after the deductible is met.  The guaranteed cost is $3,000 ($250 x 12 months).  The maximum cost would be $8,000 ($3,000 premiums PLUS $5,000 deductible).  I personally make it an objective to fund my HSA with an amount equal to the maximum cost so that when a major medical event occurs (baby!), I will have the funds ready to roll.

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How To NOT Save Money

There are so many "How To" manuals, lists, books, and articles.  I have written many myself, but today I want to write a "How To Not" list about saving money.

How To NOT Save Money

  • Take all of your spending money with you to the store
  • Fail to prepare a spending plan BEFORE the money is actually spent
  • Always pay retail price
  • Buy it as soon as you see it – always give in to impulsive decision-making
  • Always buy things brand new
  • Buy expensive items that depreciate in value (cars, boats, Ty Beanie Babies, etc)
  • Buy more items than one can possibly use "because they were cheap"
  • Eat at restaurants for at least two meals every day
  • Never ask for a better deal on insurance or have insurance policies at multiple companies

Any that you want to add?

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Debt Freedom March – Couple #2 – Month 12


This couple is THROUGH with debt!  They announced that they were breaking up with debt in October 2007.  They have agreed to share their Debt Freedom March with everyone in the hopes of inspiring others to do the same!

Here is this month's update.

Since the last update in September, another $8,600 has bit the dust!
Overall, we really have control over our budget.  Still doing a GREAT job with the cash envelopes and we DO NOT live pay check to pay check at all!!  🙂  Actually, neither one of us know it is pay day until the deposit slip comes in the mail.  It is a wonderful feeling.

Here is their updated Debt Freedom Date calculation …


 Month By Month Progress …

Sangl Says

Couple #2 have torched over $33,000 in debt in less than two years!  They are ON IT!  They have backed off on the debt pay-off plan for a little while because they are replenishing their emergency fund and their new baby fund!  Exciting times for Couple #2!

Readers …
Couple #2 is on a roll.  You can do the exact same thing!  Pull up the Debt Freedom Date Calculator (Excel) and put together your own Debt Freedom Date!
If not now, when?
My wife and I became debt-free (except for the house) in just fourteen months, and I share exactly how we did it in I Was Broke. Now I'm Not.