Financial Articles

So, you want to save for retirement, but you’re having enough trouble paying your bills every month?

Now what?

How can you possibly find enough money to save for the future when the present is difficult enough?

If this sounds familiar, then here are a few suggestions to help making saving money easier. Not necessarily easy – when money is tight, saving is probably not going to be easy. But at least it can be a little bit easier.

For this to work, you first have to be willing to make a few changes. Actually, it all comes down to one big change – and that is making a commitment. Without this commitment, and a plan to go along with it, then most likely nothing will ever change.

So, go ahead and make a commitment to yourself that you’ll do WHATEVER it takes to change your financial situation. And this change won’t come overnight, so give yourself a time frame to make it happen. Write down your commitment. And put it in a safe place.

And get ready to make it happen! Here are some suggestions for saving money – even when money is tight:

First, take a few minutes to read your commitment each day. The more you believe in what you are doing, the more you will be willing to take action, and achieve what you want!

Second, think of ways to make some extra money:

- get a part-time job
- start your own business
- sell items around the house that you don’t need any more

Third, take out your checkbook and write down a list of all your expenses for the last month or two. Write down everything. Then decide which expenses you can eliminate (and remember, you make a commitment to change your financial situation, and won’t necessarily be easy). And decide which ones can be reduced:

- cable TV
- cell phone
- internet service
- newspapers
- magazines
- entertainment
- luxuries
- anything else you can live without!

Be creative. Be honest. And be committed!

Because when money is tight, and you still want to save for your future, you either need to find a way to make some more money. Or find a way to lower your monthly expenses.

About the Author

Kris Bickell is the owner of http://www.Debt-Tips.com, a helpful site for consumers needing financial help. To learn how you can “bank on yourself”, save for retirement, and get ahead in life, sign up for the free “Bank On Yourself” report at: http://www.Debt-Tips.com/build-wealth-ct.html.

MAROTTA ON MONEY by David John Marotta

Employers and employees alike are feeling the squeeze of swelling health care costs. According to the Kaiser Family Foundation, health insurance premiums have risen at an average rate of 12 percent per year since 2000.  Unable to keep up with rising premiums, employers are forced to pass on costs to employees, to trim benefits, or worse, yet, to dump the coverage all together.

Sick of facing the same dilemma each year, more Americans are turning to consumer-driven high-deductible health care plans like those which offer Health Savings Accounts. Since their 2004 debut, enrollment has increased exponentially and is expected to gain momentum.  By 2010, the Department of the Treasury estimates as many as 45 million Americans may be covered by an HSA-eligible plan. 

Thus far, the results of HSAs are surprising. In fact, they may be nothing less than a miracle cure for America’s health care crisis. So, you say, isn’t a health insurance plan with a high deductible the exact opposite of a great benefits package?  Nope. And here’s why.

The cause of healthcare’s malignant growth has been diagnosed as a lack of “negative feedback.” All systems must have a regulator in order to dampen runaway reactions. Healthcare coverage is no exception.

One way to provide just the right amount of negative feedback is to make sure that the person who pays for a service is also both the person who benefits from the service and the person empowered to decide if the service should be given in the first place.

Traditional health care plans, on the other hand, are built on cost sharing. And, chances are high that you consume far fewer health care dollars than you pay in. Most of a plan’s health care expenses are generated by a small number of participants with chronic problems. In fact, the top 10 percent of the most ill patients account for 69 percent of total health care payouts in America.  Additional expenses are generated by a small number of participants who abuse the system and consume services simply because they are not paying for them.

Instead of handing over thousands of dollars each year to a big insurance agency, why not keep most of those dollars in a savings account and use them on the services you actually need? There is no person better suited to determining the value of a medical procedure than the patient paying for the benefit.   

Insurance is best used to limit catastrophic risk, not to pool everyday expenses. Therefore affordable medical insurance should have a high deductible. Out of pocket expenses below the deductible provide sufficient negative feedback to prevent skyrocketing insurance costs.

To help Americans cover the out of pocket costs of high deductible plans, the federal government passed legislation providing tax incentives in the form of Health Savings Accounts. 

HSAs are just that, savings accounts.  As long as funds are saved and spent on qualified medical expenses all contributions, capital gains and withdrawals remain untaxed. And like any other bank account, HSAs come complete with debit cards and checks.

To protect you against catastrophic medical expenses, Health Savings Accounts are coupled with a High Deductible Health Plan (HDHP).

You may think your insurance has a high deductible already.  However, to qualify as a HDHP, insurance deductibles must be a minimum of $1,050 for individuals and $2,100 for families. Once the deductible is met, most HSA-eligible HDHP plans cover 100 percent of most medical expenses like emergency room visits, hospitalization, lab tests and prescriptions. Still, these deductibles are nothing to joke about. Paying a couple grand out of pocket before your insurance chips in may seem like financial suicide.

The good news is HSA-eligible HDHP premiums are only a fraction of the cost of a traditional medical insurance plan. A study by the Galen Institute found that the majority of HSA-eligible plan participants pay premiums of less than $100 per month. Try comparing that to the premiums for most insurance plans which average $335 for individuals and $906 for families – per month.

As an HSA owner you’ll likely do better than break even each year. With the savings on your insurance premiums, you should be able to accumulate a sizeable nest egg. And, unlike your traditional health care plan, your HSA funds are not subject to a “use it or lose it” policy. Anything you don’t spend one year carries over to the next year. After all, it’s your money.  While you’re on a roll, why not check out the invest options offered by your bank? 

So, you ask, what counts as a qualified medical expense?  The IRS has approved a long list of qualifying expenses.  In addition to doctor’s visits, hospitalizations, lab tests and the like, the list also includes prescriptions and some over the counter drugs like aspirin. 

Qualified expenses may also include items which may or may not count toward your deductible.  For some, that may include vision and dental costs like contact solution and teeth cleanings. HSA funds may also be spent on medical expenses for a family member not covered under the HDHP. However, nonqualified withdrawals will be considered as income and slapped with an additional 10% penalty tax.

So, what happens to your HSA when you leave your employer? The money is yours. No matter how many times you change employers, your account is fully portable. Accounts owners are immediately fully vested. All contributions made by an employer belong to the account holder.

And, there’s even more good news.  Consumer-driven health care plans are positively shaping the behavior of the insured while pushing health care costs down. The Galen study found that HSA owners were more likely to engage in healthy behaviors and to get annual check-ups. It also reported they were more likely to inquire about costs and less likely to consume health care they didn’t need. And don’t think that the health care industry isn’t taking note.

It should come as no surprise that average costs for consumer-driven health care plans increased at roughly one-third of the rate of traditional insurance plans, according to Deloitte Consulting LLP. Among them, HSA plan premiums actually decreased on average by 17 percent for individuals and by 6 percent for families, according to a 2005 report by the nation’s largest online insurance broker, eHealthInsurance. Now that’s something everyone should feel good about.

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David John Marotta is President of Marotta Asset Management, Inc. of Charlottesville providing fee-only financial planning and asset management at www.emarotta.com. Questions to be answered in the column should be sent to or Marotta Asset Management, Inc., One Village Green Circle, Suite 100, Charlottesville, VA 22903-4619.

Everyone wants to save money, but no one wants to change his or her lifestyle to do so. Many people think that the only way to save is to go without; Give up eating out at restaurants, stop going to the movies, stop shopping, etc. This is not the case! It is very simple to still enjoy going out, as well as save money. You just have to find ways to spend less while going out. Here are some examples:

When going to a restaurant:

· Always use coupons! I can’t stress that enough. There are many ways to find them. The Sunday paper usually has coupons for a few restaurants. Many restaurants send out coupons in the mail hoping to get you to visit them. The Entertainment Book has coupons for many restaurants. The restaurant’s own website might have a coupon that you can print out and bring in. Sometimes you will find coupons in their take-out menu. You will be able to save a few dollars just for taking a few seconds to look for a coupon.

· Share a meal. If you’re going out to dinner, many times you can get away with ordering one main course and an appetizer or salad and sharing them with your partner since the portions are so large. By splitting them, you will save a lot more then if you had each gotten your own meal, plus you will get more of a selection since you’ll get to taste both an appetizer and an entrée.

When wanting to see a movie:

· If you want to go to the movies, consider going during the day, or in the early evening. These are all considered matinee showings, and you will usually pay about half of the price you would pay at night! It doesn’t sound like that big of a savings, but if you go to the movies just once a month, you can save $54 a year per person. You’ll save even more if you go more often!

· If you want to save even more money, you can rent the movie once it goes to DVD. Many websites will allow you to buy packs of 10 DVD rentals, and you will end up saving anywhere from $0.50-$1.50 per rental! This can really add up. If you rent one movie per week, you can save up to $78 a year! Also keep an eye out for coupons that allow you to rent one and get the second free.

There are many other simple things you can do to save money when going out to enjoy different forms of entertainment. For other tips like the ones you just read, see the website below.