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Open Enrollment Completed

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Thank you so much for all the tips and comments on my Open Enrollment post! I really found the comments to be insightful and incredibly helpful as I decided on my plans.

In the end, I opted to keep my current insurance (a PPO) and a flex spending account for both health and dependent care purchases. I may still switch to an HSA in the future, but didn’t feel comfortable doing so without any EF whatsoever right now. So it will be a consideration in future years, but not at this time.

I increased the amount of deductions for my health HSA but reduced the deductions for my dependent care HSA. And the cost of my medical insurance went up a little as well.

In the end, here are the benefits-related deductions I’ll see per paycheck:

In my open enrollment post, I’d posted all of my paycheck deductions (including required investment, taxes, parking permit, etc.) But to do an apples-to-apples comparison of just the benefits-related deductions (including health insurance, dental insurance, and the two FSA contributions), here’s how things stack up:

2016 per paycheck deduction = $382.90

2017 per paycheck deduction = $340.33

So I’ll be saving a little bit per check, but its really a pretty negligible amount. I also hope to reduce the amount of taxes taken out (pending the CPA’s review), so I may be able to “add back” a little bit more money to my take-home pay after our 2016 taxes have been finalized.

All in all, it’s still a pretty large deduction per paycheck, but I have excellent insurance and am happy with our coverage thus far. I pay for my dad’s health insurance (albeit out of his own funds, but I am the money-manager), and he pays $1,000/month for private insurance for a single individual with crappy coverage! Ugh! So I know I am really very lucky to have such good coverage at such a great rate! And as an aside, my Dad’s birthday is in March and at that time he’ll be eligible for Medicare. So hopefully that means a big reduction in his  health insurance costs.

I just wanted to follow-up to let everyone know what we’d decided regarding open enrollment. Thanks, again, for all your helpful suggestions!

~Ashley

 


Tuition Waivers for Graduate Students

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Has anyone heard about the newly proposed tax plan regarding graduate student tuition waivers? If not, take a sec and read this piece Forbes published, linked here.

In a nutshell, under the new plan, any graduate student who receives a tuition waiver will be taxed on the amount of tuition that was waived. This can amount anywhere from $25-$60k+/year of what would be considered “taxable income” under the new plan. People I know still in graduate school are freaking out, calling friends and family to reach out to legislators, and trying to figure out what this might mean for the future of their educational journey.

I have super mixed feelings on the whole thing.

If you remember my debt journey (if not, read some background here), you know that my own graduate school story was a bit of a mixed bag. The university in southern Florida where I went for my Master’s Degree did NOT offer guaranteed tuition waivers. I ended up paying nearly $50,000 for two years of school tuition, accumulating nearly $70,000 in total debt when including total living expenses.

I had the option to stay for my Ph.D., but opted to move to another university because, in short, we were BROKE! We could not afford to continue living in the super $$$ area of the country paying $$$ for my education.

So we moved to a different university, which did offer tuition waivers in addition to offering paid RA and TA positions (research assistant/teaching assistant). The salary was next-to-nothing, approximately $300/week for the 9-month academic year, but it was WORTH IT because I got to go to school for FREE! I still took out loans to help cover some of my living expenses, but at a much smaller rate compared to my previous 2 years of education.

The problem with the newly proposed tax plan is the mathematics involved. You can’t pay taxes on $25-$60k/year worth of forgiven tuition if you’re only earning $15,000/year. Where would the money come from??? Oh yeah…more loans.

The reason I’m torn is because, fundamentally, I believe in paying for the things we have. For example, my plan is to pay off my student loans ASAP rather than enter into one of the plans that would allow the debt to be forgiven in 10-15 years. First, I don’t want to wait that long to have it gone. Second, I distrust hand-out programs like this (will the forgiveness program still be there in a decade? Will the loans even be forgiven? I’ve read horror stories of it NOT working out for many who were mistakenly entered into the wrong type of loan repayment program. This is a whole other blog post in its own right. Take a second to read this heartbreaking piece on the topic). Third, it was my debt obligation, I promised to repay it, and I want to take care of it.

But I also see student loans as the next big “housing bubble.” I’m not the only one, right? Student loan debt is ballooning at an alarming rate. What is going to happen when all these students default on their loans and are unable to repay them (and/or the debt is forgiven)??? I fear it could lead to another economic crisis. So anything to minimize student loans is a GOOD thing in my eyes. From that perspective, it’s not a good idea to tax the forgiven tuition because it could end up just being more money (paid for on a student loan) that is never repaid in the end.

I’m very glad to now be in the workforce, fully finished with all of my educational pursuits. But I worry not only about my friends who are still graduate students, but about the country in general (for the reason outlined above). This is scary stuff!

What are your thoughts? Should graduate students pay taxes on the amount of graduate tuition that is waived? Or should things remain as they are currently – where universities “forgive” the tuition internally and it is not counted as taxable income? What are other potential implications of the proposed tax plan?


Competition Season is Upon Us

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All the months of training, all the months of driving hours back and forth to practice, all the blog debate on the cost of my kids’ activities (that is supposed to make you smile,) today is the day we have been preparing for! The competition season is upon us! Gymnast and I drove about 3 1/2 hours last night to be ready for his first gymnastics meet of the season today.  Woot, woot. I cannot wait to watch him fly!

Pictures of Gymnast competing a couple of years ago.

Now before you jump on me for the cost of this endeavor, it is built into my budget, Gymnast’s training cost $240 per month during the season (less in the summer when he comes less often.) I have $350 per month in the budget to cover the costs of attending meets and meet fees.  Financially, I have planned for this.

With that being said, and with my goal of getting rid of some debts before the end of the calendar year, I am doing my best to squeeze every single cent out of my budget. I thought I would share some of my tips and tricks I have learned over the last 7 years of having a child in a competitive sport (and now two children in competitive sports.)

Tips for Managing and Controlling the Expense of Competitive Sports

  1. Barter – you know this is my go to trick. I bartered for 4 years of Tae Kwon Do training, culminating with Princess getting a internationally recognized Black Belt. I also bartered for 4 years of gymnastics training. (And I am working on bartering for volleyball right now.) I have provided tech support, website design and general admin work in return for the monthly cost of training.
  2. Used Equipment – all the teams we have participated in have at least yearly “used equipment/uniform sales.” Taking advantage of these can literally save you hundreds of dollars a year. This year Gymnast uniform package cost me $200 dollars! I would have happily bought used if he weren’t the biggest boy on the team, alas, all new for him this year.  But you get my point, right?
  3. Car Pool – when we first started gymnastics, another little boy on our street did as well. We traded off driving every week, it was fantastic! It gave me some of my time back AND saved me some gas money. That is not an option where we are now, but if it were, I would jump at it!  I’m just grateful that now both kids will be in sports within a couple of miles of each other rather than states and counties away.  That will save me some time and money compared to the spring.
  4. Travel – If your sport requires travel with overnights, those hotels can quickly add up, especially with one or more competitions per month during the season. If at all possible, we have driven up and back on the same day, but sometimes, you just can’t do that (especially when there is only one driver who needs to sleep sometimes.) I have found three tricks for saving on hotels outside of the typical bargain hunting as far in advance as you can.
    1. Share a room with another teammate and their family. This is pretty uncomfortable to me, being a single mom, so not one we really do. But I know others who do this regularly.
    2. Use credit card points for hotel stays. Now this one I do ALL the time, and was probably the reason I was no opposed to giving up my credit card use. I have one card I use, that I use like a rolling line of credit, use it and pay it. The points add up quickly that way. That is how I paid for Gymnast and my room last night.
    3. Join hotel points programs, and save them up. I am a member of two Hotel programs, both free to join. Any time we travel, I look for those hotels first. Every dollar spent, we get points. Every night spent, we get points. You get the picture. (Most of them also have credit cards that allow you to earn more points. As tempted as I am at times, I know that is not a wise choice for me.) Those points add up. And we use them for stays.
  5. Food – Nuts, granola bars, jerky. I keep some of each in my car, all the time. It helps quench the “I’m dying of hunger” needs without stopping at the most convenient drive thru or convenient store. This is especially key after practice when we are still an hour away from home.In addition, all our hotel choices when we travel, offer FREE breakfast and most of the time have a free fruit snack for kids i.e. apples. When we travel, we pack the meal for the ride there. Typically sandwiches and chips. This typically leaves us with 1 maybe 2 meals that I must pay for. In all cases, we drink water, depending on how many of us go, this can save me up to $15.

These are just a few of the tips I have learned over the years. There are as natural as breathing to me. My kids are also well versed in our frugal-ness when traveling.

One thing we like to do when we are in a new place, as we will be a lot this year, is try things unique to those places (within reason.) Typically, one child gets on Yelp to find the restaurant.  We LOVE Yelp in that we can find things based on food type, cost and location. If they choose something that is a bit more pricey, not all the way pricey, they know as soon as we sit down and I eyeball the menu, they will get a budget for their meal. It’s fun to watch them barter and share things to try more, get more.


Open Enrollment

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First, thanks so much for the many thoughtful (and kind!) comments on my budget post. When I saw the comment count shoot up it made me nervous to read through them, but almost everyone was really very kind and forgiving (and generous in offering support, tips, advice, etc.) THANK YOU!

Speaking to one of the common comment themes I saw – many people asked about my take-home pay. For a $95k salary, my take-home ($2440/biweekly) is pretty low. The reason for this is that I have a LOT of things withheld and/or paid from my check pre-tax. This list includes the following (all numbers from my most recent paycheck):

  • Medical insurance ($125.50/check)
  • Dental insurance ($52.28/check)
  • FSA – Health ($68.37/check)
  • FSA – Dependent Care ($136.75/check)
  • Retirement account (required and already investing at the lowest amount so no chance to reduce – $256.91/check)
  • Parking permit ($38.45/check)

Plus, of course, all my taxes as well ($552.13 from my last check).

If I added this all up correctly, that comes to a whopping $1230.39 taken from my check before it hits my direct deposit! WHOA! That’s a third of my check!

So the question came up – can I change some of these things so I can get back more money per paycheck. And the answer is – YES! Right now is my open enrollment period and I’d LOVE to have some help with figuring things out! Let me address things one at a time.

Taxes

I can likely lower my tax withholdings per check, but have opted not to make any changes right now. Taxes are not part of my open enrollment, so I can change those at any time. Based on what feels best to me (and many comments/advice I’ve received), I’m going to do our 2017 taxes ASAP once the new year hits. That will give us a better feel for how much we really owe and we can make adjustments accordingly. Given our huge tax debt (that we’ll be paying on for what feels like a lifetime), we’ve opted NOT to reduce our withholdings for the time being. We’re likely over-paying a little this year, but we feel okay with that – any extra money can go to help reduce the tax bill and we can re-adjust after the CPA has gone over everything.

Retirement, Dental, Parking

These are all pretty well “set” and cannot be changed. We have limited options for dental – I can decline the insurance, but we use it and need it. So it stays. In terms of parking, I live too far to walk/bike and don’t have anyone living nearby to ride-share with. So unless I switch up my Mom car for a motorcycle (never happening), this bill is pretty much “set” too. Retirement is required by my employer. I used to invest a full 10%, but have reduced down to the minimum (7%) already. No way to make this any lower.

Medical 

So here is where I could REALLY use some advice. Currently, we have a PPO plan and this entire year I’ve been thinking that, come open enrollment, we’d switch to a HSA. But when I started really doing some research to compare the two options, I think we’d end up spending MORE with the HSA. Yes, we’d save on monthly premiums, but the out-of-pocket costs and deductibles are much higher.  Here are some side-by-side comparisons I put together. What do you think?

Health Savings Account PPO 
Per-paycheck Premium $61 $150 (note: this is more than listed above because premiums are going up)
Overall Deductible In-network:

$1300/employee; $2600/family

In-network:

$500/employee; $1,000/family

Other Deductibles Non-preventive prescription coverage:

$1300/employee; $2600/family

None
Out-of-pocket limit In-network:

$2,000/employee; $4,000/family

In-network:

$1,000/employee; $2,000/family

Not included in out-of-pocket limit Premiums and health care not covered by the plan Premiums, drug co-pays, and health care not covered by the plan
Annual limit on what the plan pays None None
Costs for common services with in-network providers.

Primary care to treat illness or injury

Specialist visit

Other practitioner office visit

Preventive care /screening

Diagnostic (x-ray, blood work)

Imaging (CT/PET/MRI)

Mental health

Generic drugs

 

 

10% co-insurance

10% co-insurance

10% co-insurance

No charge

10% co-insurance

10% co-insurance

10% co-insurance

non-preventive: 100% until deductible is met. Preventive: $10 copay

 

 

$15 copay

$30 copay

$10 copay for OB/GYN

$15 copay primary care; $10 OB/GYN

No charge

No charge

$15 copay

$10 copay

 

I receive biweekly pay (26 checks/year). So the HSA annual premium is $1586. The PPO annual premium is $3900 (a difference of $2314). But if we’re having to pay $2600 for our family health deductible + $2600 for the prescription deductible (compared to a $1,000 deductible for the PPO plan), I think it’s just too much money out-of-pocket! (though, caveat, I’m no expert with healthcare – does the out-of-pocket max only apply to healthcare, or would that also include prescription coverage??)

My thought is that we’d be better to stay in the PPO. It also scares me to think of paying 10% of any imaging, diagnostic, etc. We’ve been lucky thus far (knock on wood), but we have young kids – broken bones are a given at some point, right?

Those more experienced than I am – thoughts?

Flex Spending Accounts

The dependent care account contributions will decrease in 2018 and even moreso in 2019. Right now, we still have hefty monthly bills. Our girls are in kindergarten and, though half-day kinder is state-subsidized, the state does not cover the costs of full-day kinder. We pay that. The total was actually right about $1,000/month, but we paid out of our FSA a huge chunk for one of our kids’ entire semester of tuition (for which we received a discount). We’ve been paying the remaining costs out-of-pocket (the dependent care FSA was depleted months ago).  For next year, we’ll only have one semester worth of full-day kinder costs (the second half of the year they’ll advance to first grade – totally free!), plus the costs of care for summer and after-care, as needed. (Note: several people have suggested that hubs take over childcare so I just wanted to address that here:  hubs does handle the bulk of childcare. Where we live, half-day kinder is 8:30-11:30am. Hubs is in classes full-time that extends well beyond that timeframe. The full day kinder program is 8:30-3:00pm. Currently, hubs gets the girls at 3:00pm every day except Wednesday – his long day – so we pay very little in “after care” at the present time. Just one day per week. This arrangement is unlikely to change for the rest of the academic year).

Bottom line, we should be able to lower the amount of FSA money withheld for dependent care for next year, thus increasing the size of my take-home pay.

The health care FSA is entirely dependent upon whichever medical plan we choose. If we get the HSA, we’ll use the health savings account. If we keep the PPO, we’ll keep a flex spending account for medical expenses. This year, we put $1750 in our health FSA and it was not nearly enough. If we keep the PPO, we’ll increase our health FSA contributions probably to about $2250-ish (though I’d need to crunch numbers first).

So the big question is…..HSA or PPO (with a FSA)? Pros and cons? What are your thoughts and why?


Internet Scammers

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Obviously we all know about internet scammers. These scum-of-the-earth types who tend to prey on older folks who don’t know any better. It’s something I’ve heard people talk about for years, but I’ve never actually known anyone who has fallen victim to these scams. Until today, that is.

One of my dear childhood friends just posted on Facebook a series of screenshots to help warn others of internet scammers. My friend’s mom is a recent widow, her husband just passed not quite a year ago. She is still grieving, lonely, sad. In a word…vulnerable.

So when some creep online (with a fake profile/pretending to be a high-ranking individual in the military) reached out and initiated an online relationship, she jumped at the chance to fill the aching void in her heart. His story was that he needed money for military purposes. The U.S. doesn’t negotiate with terrorists, so he needed money to free one of his servicemen.

Over the course of the past few months, she’s been wiring this creep money over and over again. In total, she’s sent over $100,000. A huge chunk of her entire retirement savings.

My friend (her daughter) just found out about it and is, obviously, totally heartbroken over the whole thing. Since the internet scammer is in another country, it will be hard to find him and there’s almost no chance of recouping the lost funds. What an agonizingly painful lesson to learn the hard way.

I post this today to bring attention to this issue and warn readers to help look out for the loved ones in their life who might be vulnerable to this type of attack. My siblings and I had been worried about this with our dad. When he was first diagnosed with dementia, he still had access to his bank account. Even though I took over managing and paying his bills, he still had a debit card and would occasionally go to the bank to get cash just to have on-hand. It’s tough to take away a grown-ups’ freedom and we tried to go slowly with one thing at a time (first he moved to Texas, then to an independent living facility, then we took away the car, then we took his credit/debit cards, then he moved to a locked memory care facility). But while he had access to his money, we all knew he was a likely target. He once showed me one of those fake million-dollar-bills quite excited because he thought he’d stumbled across a *real* million dollars! Not a person who should have access to large sums of money.

It’s a sad story and a cautionary tale. I’ve also heard of much more sophisticated scams taking place via Facebook. Ones in which an individual will find personal information (e.g., children’ names, grandchildren’ names, etc.) and use the personal information to fabricate stories and lies in an effort to acquire money from the victim. So sad for those who fall victim! Be careful, y’all!

Do you know anyone who has fallen victim to one of these internet scammers? Has anyone tried to scam you before?


Christmas is Around the Corner

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merry christmasI have been amazed at the number of my Facebook friends who are already decorating for Christmas. I am really looking forward to doing just that, but will definitely wait until after Thanksgiving. It will be really new for us as we got rid of my of our Christmas stuff with the exception of a few personal things. We don’t even have a tree! (Last year we spent Christmas in Georgia and Texas so didn’t do anything in regards to decorating.) With that being said, the decorations are not the point of this point.

I’ve already purchased/made presents for all my Texas family and will ship them right before Thanksgiving. The total cost for those 6 presents was less than $50 – 3 brothers, 1 sister and my parents. The money came from my discretionary spending (I get $20 per week from the allowance line item) so it is not in my budget, as will the remainder of my presents. My kids will purchase presents from their allowance or money they earn.

However, the Christmas holiday is a minefield for those of us who do not always make the wisest financial decisions. I am wanting to stop the madness and work with a budget.

Christmas Tips and Tricks

Here’s what I’ve come with up so far as I start planning.

  1. Purchase tree from Boy Scout troop (my little cousin is a boy scout and his dad will deliver it for free.)
  2. Homemade decorations from Pinterest boards. (I’ve got a ton of crafty stuff so I believe this will be free using supplies we have on hand.)  The only exception is lights, we don’t have any for the tree.
  3. Presents for my kids – a book, a game/toy/crafty item and a clothing item for each child. I would also add a stuffed stocking and a personal gift. (This is where I really need a budget!)
  4. We are eliminating candy this year, but typically that would be my go to cheap present.
  5. I also need to limit who I buy presents for as I love giving gifts…don’t we all.  I am going to sit down soon and make a list. Then I must stick to it.

How do you keep Christmas under control? What tips and tricks can you give me to stay on the right track financially?


Ashley’s Bloated Budget

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I have to be honest. I’m totally nervous about this post.

When I first started blogging here back in early 2014, I experienced a lot of backlash. It’s tough to put your entire financial world out there on the internet for a bunch of strangers. And tougher, still, to take in the comments and criticism of very personal financial decisions.

But then the tides changed once I started experiencing some success.

Within 3 months of beginning to blog, I paid off over $10,000 in credit card debt. In total, I paid off just over $25,000 of debt in 2014, just over $26,000 of debt in 2015, and over $30,000 of debt in 2016!!!

Once I was winning with money, the criticisms mostly melted away. I felt more support and encouragement. Not as much judgement or negativity.

Then the summer of 2017 occurred. Poor spending decisions have been made. Income has been reduced. Outflow has increased. I’ve been struggling with some personal mental health issues which have prevented me from spending as much time and attention with our family budget as I should have. Things have just spiraled.

There’s no one single “thing.” It’s more like an avalanche of smaller stuff. Death by a thousand cuts. And all the sudden I look up and realize that our minimum monthly debt payments are so out-of-hand that I don’t know what to do. We’re nickel and diming ourselves to death. To the point that we have no money for food. We have to rely on credit to buy our groceries.

I tried to start over from scratch. I’ve been using YNAB, but I haven’t been able to make the money work for several months now. Our expenses exceed our income, no matter what I do or how I try to shuffle things around, there’s just not enough. So I opened a simple Excel spreadsheet. I wrote my monthly take-home pay at the top and started listing expenses in order of importance. Here’s what I got:

We’re down to $1264 to spend on all of our monthly needs in terms of food and clothing, savings, and/or additional debt payments.  It doesn’t feel like enough….especially since the debt figure ($1098) does NOT include any student loan payments, given that they’re in deferment currently.

On my post about increasing student loan payments, many people tried to give me encouragement that we COULD put $1,000/month toward student loans. That it was totally possible.

Well…..not with only $1264 at the end of the month. Not when we don’t have enough money to buy food or gasoline for our cars. Not when there’s zero wiggle-room because we literally don’t have a single penny in any emergency fund. Not when Christmas is coming up and we have no way to buy gifts for friends or families. Not when our property taxes are coming due!

Can we decrease our fixed bills? The “utilities” line item ($650) includes water, electric, HOA, cable, internet and phone. We can try little things to save on energy, but we’re in a contract with the cable/internet company and same with our phones. HOA is also “set.” So not a lot of wiggle room there.

We do have some debt payments that have lower balances – once we knock them out we can reduce the monthly minimum. But we can’t just be paying minimum payments – we have got to be paying as much over minimum as possible in order to make any headway.

I’m preparing a full debt update so you can see a larger financial picture (give me a couple days to get it posted). But it seems pretty clear to me – we have to find ways to increase our income. $4880/month is not enough for us to achieve our financial goals.

My sister recently added me to a Dave Ramsey Facebook group. It’s been a huge motivational boost to see so many stories of sacrifice and determination. So many debt-free success stories, pictures of fully paid homes, etc. I know we will get there. Our path hasn’t been linear and I think that’s okay. Sometimes “life happens.” Sometimes you have to take a step back and focus on yourself or your family. But we don’t want to live in a state of debt like this forever. The only way out is to put our heads down and plow forward. And that’s just what we intend to do.

As always, I welcome and appreciate your constructive criticism. I’m back to square one here. Googling sample budget plans and just trying to figure out how to survive without taking on additional debt. I’m a little nervous and scared of the path ahead. Our first 2 years of debt-reduction were totally bare-bones. I remember the days well. That was back when I was working part-time from home so it was easier to cook from scratch, meticulously research and shop sales, etc. We’re in a totally different situation now.

It wasn’t easy then. It won’t be easy now. But nothing worth having ever is, now is it?

Give me all your tips! Link to web resources, give me book recommendations. Even just a word of encouragement is appreciated. Thank you all, especially those of you who have been around and seen my story evolve over the past nearly 4 years! It’s been quite a journey and we’re only half-way through it!

 


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