How the Health Care Law Will Affect You in 2014

The Health Care Law is still alive and is the first major overall in the health care industry in the past 100 years.  Americans will have the option to shop for the same type of health insurance that Congress has which will reduce medical costs.  The health care law would reduce medical costs and out-of-pocket costs for middle class consumers and small business owners and reduce prescription drug costs for Medicare recipients. 

Over 40 million Americans are without health insurance and would be covered under the law which becomes effective in 2014.  Approximately 64 million women have no health insurance coverage, inadequate health care coverage, high medical bills or debt problems, or problems accessing health care because of the rising cost.  Health care insurance costs increase at a higher rate than inflation.  Consumers have longer appointment wait times, less service, less coverage and get sicker each year. 

Many people go into debt and have bad credit due to high medical bills because they do not have health insurance.  Health insurance reduces medical costs by from 50%-80%. An emergency room visit costs $500 or more without health insurance.  On average a doctor’s office visit can cost $130 for basic service without health insurance.  Purchasing Prevacid for acid reflux without health insurance can cost $176 for a 30-day supply.  If I didn’t have health insurance and only had to pay $95 that would be a small price to pay for medical services.  The $95 fee would pay for itself with just one doctor’s visit.

Health insurance companies will no longer be able to deny coverage based on pre-existing conditions, will be required to disclosure monthly premium increases and justify increases and will not be able to increase rates or cancel service if you get sick.  Health insurance companies will be required to offer coverage regardless of your health condition and cannot increases rates or cancel your coverage when you get sick.

Individual coverage monthly premiums will decrease by 14%-20% for self-coverage and decrease for individuals who receive coverage through their employer.  Over 50 million consumers will be able to receive free preventive services such as cancer screenings.  With these statistics I would rather be insured than not insured. 

9 Ways to Save Money on Airline Fares

Gas prices indicate airline fares this summer will be expensive. Flying is the quickest way to get to your vacation destination, however there is a cost for convenience.  I was afraid of flying and my first flight was 45 minutes to New York. My second flight was to Germany so I quickly overcame my fear of flying.  Now I love flying.  What I don’t love is the additional costs to fly for baggage, heavy baggage.

The cost of airline fares also depends on:  your destination, time of flight, the day of the week you leave, number of connections, airline class – coach, business, first class; how long you stay,  the day of the week you return, what airline you fly to name a few.

American Airlines and Delta charge $25 for the first bag checked in, $35-$40 for the second bag.  United Airlines charges $25 for the first bag and $35-$40 for the second bag.  US Airways charge a $25 for the first bag and $35-$70 for the second bag. Southwest does not charge a fee for checking the first two bags. Jet Blue does not charge for the first bag and charges $40 for the second bag.  Plan ahead so you don't get caught in the price increase that will occur this summer and pack light. Here are 9 tips to help you save money on buying an airline ticket.

1. Call the airlines. Many airlines have specials that are not advertised on their website. Call the airline directly and ask about current specials or sign up for their free newsletter or airfare alert service.
2. Find deals. Shop around to find the best deal. Visit websites like www.travelocity.com, www.kayak.com, www.hotwire.com, www.priceline.com, www.orbitz.com or www.cheaptickets.com.
3. Plan ahead. Try booking your flight at least 2 weeks in advance to save money.
4. Be flexible. Try booking your flight during the week and avoid flights near holidays. You can also search for flights with one or two connections instead of non-stop flights to save money.
5. Choice Big. Book flights that fly out of larger airports to save money.
6. Discounts. Ask about discounts, some airlines offer discounts to students, senior citizens, government employees, AAA members, and other organizations.
7. Act fast. When you see or hear about sales or discounts move quickly to capitalize on the deal because they usually don't last long.  
8. Talk to others.  Talk to friends and neighbors to find out how what deals they got in the past.
9. Memberships.  Ask for discounts for membership to Diner's Clubs, AAA, AARP, etc. Also check social media sites for discounts.

Will the July 1st Student Loan Changes Affect You

President Obama asked Congress to extend low student loan interest rates for another year. If Congress cannot come to an agreement and pass the bill, student loan interest rates for subsidized government Stafford loans will double increasing from 3.4 to 6.8% on July 1, 2012. However, the increase will only affect undergraduate students who are issued government loans after July 1, 2012.  Interest rates for existing loans will not be affected.  

The interest rate for subsidized loans which are based on economic need is fixed for the life of the loan.  You are not charged interest while you’re in school at least half-time and during grace periods and deferment.  However, a six-month grace period on interest charged on federal subsidized student loans has been suspended which will cause interest to accrue the day after a student graduates from college from July 1, 2012 through June 30, 2014. The interest rate for subsidized loans is fixed at 6.8% for graduate and professional degree students and will not be affected.

The interest rate for unsubsidized student loans is 6.8% and will not be affected.  Interest accrues on unsubsidized loans from the time it is disbursed. You can pay the interest while you are in school and during grace periods, deferment or forbearance, or you can allow the interest to accrue.  

For military service employees, the interest rate on loans obtained before entering military service may be capped at 6% during your military service. However, you need to contact your loan servicer to request this benefit. Interest is not charged for loans disbursed after October 1, 2008 for up to 60 months, while serving on active duty, serving in a hostile area, performing qualifying National Guard duty during a war or an emergency. 

Private loans may initially offer a low interest rate similar to a balance transfer credit card, but the interest rate is variable and can increase at any time. The Georgetown University Center on Education predicts that by 2018, approximately 63% of all jobs will require some graduate school education. Here are 9 tips to protect yourself from the July 1^st student loan changes:

1.     Consider going to a cheaper college.

2.     Create a budget and stick to it while you are in college. 

3.     Determine if you will be able to afford to make the minimum loan payments before applying for the student loans. 

4.     Think hard about your major and map out how you can pay back student loans on your starting salary.

5.     Extend school for 5 to 6 years by working a co-op.

6.     Pay for tuition for participating in a work-study program.

7.     Work during the summer and save a large portion of the money to pay for school.

8.     Work full-time and go to school part-time.

9.     Consider staying at home for 1-2 years after graduation to save money and pay down student loans.

10.  If you are on active duty verify the terms and conditions of your student loan and the benefits for military personnel.

Unexpected events occur frequently and it is best to plan ahead instead of waiting until the last minute or being blindsided.

8 Ways to Save Money on Vacation

Every loves to travel during the summer and many family vacations usually start during the Memorial Day holiday including me.  I went to St. Thomas for a week and didn’t want to come back home.   Unfortunately, the economy has made it difficult for many families to take a summer vacation.   

We work 10-12 hour days or more, we rush to work, rush to get the kids, rush home, rush to eat dinner and then repeat the entire process all over again the next day.  We never take the time to relax which can lead to health issues and more money out of your pocket.  We should take a page from overseas workers who take 2 hours lunches and get 6 weeks of mandatory vacation.

Everyone needs to take time out to relax.  You can’t be the best you if you don’t take time out for yourself to recharge.  To save money for summer vacation or mini-get a ways start looking for bargains on airfare and hotels.  If you can afford to go on vacation without charging it on your credit card then do.  It’s no fun going on vacation and then paying a credit card balance for the vacation for the next 6-12 months. Here are 8 ways to help save money when planning your vacation. 

1. Plan ahead. Plan in advance to save money. Buy toiletries and other necessities before traveling.
2. Shop around. Shop around to find the best deals. Visit websites like hotwire.com, priceline.com, kayak.com or hotels.com to find cheap rates for hotel, airfare and cruises. Purchase services together such as air and hotel or air, hotel and rental car to save money.
3. Act fast. When you see or hear about sales or discounts you have to move quickly to capitalize on the deal because they usually don't last long.  
4. Talk to others.  Talk to friends and neighbors to find out how they planned their vacation, i.e. ask about any discounts or sales, restaurants, shops, etc.
5. Buy traveler's insurance. Buy traveler's insurance.  This will reduce the costs of medical bills that could accrue if you get sick on a cruise ship or flight and prevent you from going into debt. 
6. Use restraint. Use restraint while on vacation. Don't buy everything you see.  If you know you will be tempted don't even go into the store.  Buy items or souvenir gifts at flea markets or only buy items that are on sale.
7. Snacks. Buy snacks and a few drinks and pack them in your suitcase before you leave. This will tide you over when you get hungry while on vacation until you are able to eat a full meal.  This will also help you save you money that you would spend on midnight snacks.
8.  Safety. Buy traveler's checks which can quickly be replaced if lost. If your credit card is stolen you may not have another credit card available to purchase any necessities. 

Don't Let Your Credit Hold You Back

According to FICO.com the average credit score now is between 690 and 700.  Average credit scores are increasing because consumers have begun to pay down their debts. However, many Americans are still in debt, some haven’t even begun making payments or can barely afford to make the minimum monthly payments.  Fifty percent of Americans spend more than they earn. 

Being in debt affects your credit score either negatively or positively.  If you pay your bills on time you score will increase, if you don’t it decreases.  Seventy-nine percent of all credit reports contain at least one error and 75% of all credit reports contain one major error.  According to a 2006 Consumer Action study, 27% of Americans had never checked their credit. Another 33 million had credit reports that do not contain enough information to generate a credit score. Twenty-four million Americans had no credit file.  According to a TrueCredit survey 90% of Americans don’t know their credit score.  

Due to the recession, 720 is the new 680.  Banks and lenders are now stricter with criteria for approval of a credit card or loan. If you have bad credit you will probably be denied. However, there are some companies that may give approval but it will be at a high cost.  You will have to pay higher interest rates and possibly upfront fees. 

Bad credit can hold you back from getting approval for a student loan, mortgage loan, business loan, or personal loans.  Bad credit affects:  getting hired, interest rate, terms and conditions, getting capital to start a business, insurance rates, approval for renting usually requires first month or first and last month deposit, ability to generate wealth, products and services offered, ability to get access to programs tailored to those with good credit, relationships and credibility with service providers and employers.

Bad credit and being in debt can also cause you to lose focus, cause anger, anxiety, stress and health issues.  Debt can affect relationships with friends, family or your spouse.  One of the biggest causes of divorce is due to finances.  Paying down debt can eliminate those negative feelings and improve your relationships as well as your credit score.

Using credit is a balancing act and most Americans don’t balance it very well which is evidenced in the amount of debt owed by Americans and their low credit scores.  If is crucial that you pay back any debt owed starting with delinquent accounts, especially if you plan on applying for credit in the future.  Paying down debt also prevents legal action taken against you for an outstanding debt.

Pay down debt as soon as possible to help increase your credit score, increase your savings account balance, reduce stress, improve relationships with creditors, and improve your financial future. Don’t let your credit hold you back.