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May 19, 2010
There are insurance companies that offer life insurance without the hassle. As you may know, when you complete an application for life insurance, the process can take months. First you have to go through the process of providing a blood and urine sample for inspection. This usually involves someone coming to your home to collect the samples. Then underwriting does their due diligence in checking your medical history. For most people, if they are approved it takes about two months to receive a policy.
Some companies offer products that you can apply for, go through underwriting, and receive a policy within a week. They have a streamlined underwriting process, without the blood and urine samples. They check your medical history with the MIB. No, it’s not Men In Black. It’s the Medical Information Bureau. They will also check your MVR or moving violations report and your prescriptions records. That’s it. Once they review your history they will issue a policy. You don’t have to go through the inconvenience of giving samples and waiting for a month or two.
May 13, 2010
There’s more than one way to create Money Power for yourself. Money Power is the difference between your income and your expenses. Creating more income for yourself automatically increases your Money Power. Here are a few ways one can earn extra money. One way to actually earn income is to join a direct selling company. It’s one of the easiest ways to earn extra money, especially if it’s a product you’re interested in. Avon is one of the best examples of how you can start your own business for $10 with unlimited income potential. Some full time Avon representatives earn six figure incomes. They are the exception to the rule, but any extra income is worth the effort. Another way to earn income is to start your own business. Even if it’s only part time, at night, or only on weekends. There is an example of a man that started giving guitar lessons in his home. He now has 2 clients and earns $240 extra per month. Every little bit of extra income helps and who knows, it may grow into a full time career.
May 05, 2010
It seems lately that everywhere you turn someone is encouraging you to get rid of your car or appliances in exchange for a newer, more fuel efficient or energy saving model. Even with the government rebates, there is still an argument to be made for keeping a clunker though. First of all if your car or appliance is paid in full, you would then be looking at paying cash outright, or financing your purchase with interest when you were already in a good position financially by not having a payment. You may need to divert funds that could already be allocated to other bills or to savings. There are also other factors to consider such as depreciation of a new vehicle, insurance rates, and manufacturing costs.
I’ve read that 25% of a cars carbon dioxide emissions come from the manufacturing process. Since your used car has already gone through the manufacturing phase, it produces no additional environmental demand. Even though it may get less gas mileage, driving it responsibly arguably produces less pollution than purchasing new.
Apr 29, 2010
Most health insurance carriers use data screening to identify individuals with cancer and other illnesses so that they can target them for rescinding coverage. This practice will no longer be allowed under the new health care reform laws. In fact many of the insurance companies have agreed to voluntarily stop the practice before that part of the bill goes into effect in September 2010. No wonder that critical illness is a leading cause of bankruptcy.
Photo Credit: kozumel
Apr 28, 2010
Child identity theft is a growing crime. In 2003 the Federal Trade Commission, the government agency that accepts identity theft complaints, received ove r 6,000 complaints of identity theft of children under the age of 18. In 2005 it was over 11,000. You can see that each year the trend is growing. One of the problems with child identity theft is that it often goes undiscovered for years. The first thing you can do to protect your child begins with registering your child for Social Security. Ask yourself if it is truly necessary to give out your childs Social Security Number. Sure, you will need it for tax purposes and you may need it for financial institutions, but otherwise there should be very few times you will need to give it out. Also look for clues that your childs information may have been leaked. If all of a sudden you begin receiving unsolicited credit card offers for your child and they’re 6, that is an indication that some investigation should begin.
There are several companies that will assist you with restoring identity and credit that has been stolen. There are even some, that for a few more dollars per month, will monitor credit reports for your name and report any activity. Most of these services range from $7-$15 per month. Some have an adult rate and a seperate child rate, while others cover the whole family for one cost.
Apr 21, 2010
A portion of the new Health Care Reform act focuses on Long Term Care. It is a Government sponsored LTC plan called CLASS or Community Living Assistance Services and Supports Act. This act will provide for a national LTC entitlement program. The plan offers a basic level of coverage guaranteed issue (no qualifying based on health) to working Americans. It actually works like a “pay ahead” plan like Social Security.
The plan can be offered by employers, but not mandatory. In that case premiums would be paid through payroll deduction. The plan will be offered to everyone even if self employed or their employer doesn’t offer the plan. It will have a mandatory 5 year vesting period before any benefits are payable. There is no set premium yet, but estimates are between $150-$250 per month. Once an individual has the loss of 2 Activities if Daily Living, or Alzheimers, they would be eligible t0 receive at least a $50 benefit per day towards some type of Long Term Care. The plan may pay up to $75 per day depending on the level of ADL loss. And there will be specific enrollment periods that employees could enter and leave the program.
The problem with this type of plan is that is doesn’t go far enough to cover someone fully. The average annual cost for Home Health Care is over $25K. The CLASS plan would only fund half the cost. An assisted living facility average cost is $41K, the plan would fall short there as well. And for Nursing Home care at an average cost of $72K per year the plan is very short. For most people, the need for a private LTC policy to supplement this plan is necessary.
The CLASS plan will not go into full effect until 2016, so the final details are not complete. But hopefully this gives you some idea of what to expect.
Apr 14, 2010
Most employees have the ability to contribute to a group 401K retirement savings plan through their employers. Most employers will even match their employees contributions up to about 6%. Some employers offer a full pension plan with no employee contribution. However, if you are self employed or your employer does not offer any type of retirement plan, you will want to look into starting an Individual Retirement Plan. These plans are a way to save for retirement while also receiving tax advantages for doing so.
There are basically 2 types of plans available for individuals. The Traditional IRA and the Roth IRA. They both have beneficial attributes. You must determine the right one for you. In a Traditional IRA your earnings grow tax deferred until after age 59-1/2. When you withdraw them they are taxed at your current rate. Contributions and earnings can be withdrawn penalty free after age 59-1/2. In addition, in a Traditional IRA your contributions may be tax deductible.
The Roth IRA is the other plan available. In a Roth IRA your earnings are tax free if withdrawn after age 59-1/2. Contributions (only) can be withdrawn tax and penalty free at any time. However, unlike the Traditional plan, contributions to the Roth IRA are not tax deductible.
In both plans you have the ability to choose your investments. Typically you have the option to select from thousands of stocks, bonds, or mutual funds. A mutual fund is a vehicle that uses combinations of investments and is managed by a fund manager. Investing with a mutual fund allows you to spread your risk over a larger pool of investments.
Apr 07, 2010
For our last giveaway we asked our readers if they were getting a tax refund and how they were spending it. We received over 350+ responses and quite a few interesting answers. I examined all the responses and broke them down into pie charts. You should be able to notice quite a few trends in personal finance. Some expected, others not so much.
Are you expecting a tax refund?
Apr 07, 2010
Recently, the Federal Government passed a law forcing credit card companies to display more information on your credit card statement to help Americans understand the concequences of paying only the minimum balance. The first section is “If you make no charges using this card and each month you pay: Only the minimum-it tells you how long it will take to pay it off and how how much will will end up paying total with interest. Then they have another section that states if you pay a higher amount how long that will take and an estimated total amount. But this section also shows the savings made by paying the higher amount. They have also added a phone number for credit counseling services.
I am not a big fan of Government intervention into private business. It seems to be a growing trend lately. I think it is very apparent to any credit card holder that if they pay more each month they will pay the balance off faster and thus pay less interest. Nonetheless it is there now and if it helps someone control their debt or get counseling for a problem it can’t hurt.
Apr 06, 2010
I would like to thank everyone who entered the latest giveaway hosted on the blog. The two winners have been selected using a random generator and they are: Susan Varney and Kim H. They will be contacted by e-mail shortly to see where they would like their giftcard sent. We really appreciate everyone who entered and it was fun reading what everyone did with their tax refund. We were also extremely grateful for the readers who shared their tax tips. We are in the process of creating a follow-up post which breakdowns everyone’s responses. This is our second giveaway and we are already planning our next one so stay tuned. Make sure you subscribe to our RSS feed using the link below so you don’t miss out on the next giveaway!
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