Tag Archives: Money Work

More Bang for Your Buck: Eight Money-Saving Tips

More Bang for Your Buck:  Eight Money-Saving Tips

Less work and more money? This idealistic mantra may sound like an unattainable dream, but may in fact be closer than you think. You can increase your money supply without increasing your hours just by avoiding excessive spending in the first place. Most people refer to this plan as a budget, or spending plan.

Below are a few ideas to get the most out of your money:

*Create a spending plan. Some people have negative associations with the word “budget.” A budget does not necessarily mean you are going to do without. Create a plan including all of your monthly expenses. Once you start planning your spending, you may find you are spending more wisely.

*Never forget to pay yourself first. Savings should always be at the top of your spending plan. If you wait until the end of the month to put money away, you may find there is little left to invest. As a general rule, always save 10% of your salary before spending the rest.

*Keep good records. If you record your expenditures for a month, including small items like coffee and snacks, you may be surprised to find how quickly little purchases add up. At the end of the month, assess your spending pattern accordingly; once you see where your money goes, you might make better choices regarding your spending.

*Live within your means. Assess each purchase thoroughly by asking if you really need to buy. When contemplating a larger purchase, a good strategy to remember is to walk away from the item or leave the store, and think about the purchase. Sometimes the pressure of the environment can force you to buy something you really don’t need or want. Walking away gives you the opportunity to think clearly, and if you truly want the item you can return to the store.

*Shop for value. It always pays to compare prices. You may even want to consider buying items you use regularly in bulk. Watch for sales and consider buying used cars or appliances, since the depreciation of the first one to two years can save you plenty of money.

*Cut back on debt. Think of a credit card as a commitment to pay for the item out of money you have yet to earn. Never owe more than you can pay off in one or two paychecks. Finance charges can deprive you of more of your hard-earned money, which is just like throwing it away. If you can’t afford it, you shouldn’t buy it.

*Choose to eat in. Dining out is very expensive; Drinks and desserts at a restaurant are costly items, and the tip adds 15-20% more to your food costs. Save dining out for special occasions, rather than on days when you don’t feel like cooking. By planning meals in advance and shopping from that plan, you will never have “nothing to eat.” There are also excellent online recipe guides that list several menus from the same ingredients, so you won’t waste any groceries.

*Reduce housing costs. This fixed expense can sometimes be unnecessary. If you can, try downsizing to a smaller house or apartment. If you rent and plan on staying in the area for a while, consider buying a place. Buying a house is an investment, while renting is usually a waste of money.

Wealthy Americans See Need in Long-Term Care Insurance

Wealthy Americans See Need in Long-Term Care Insurance

“You can’t take it with you when you go.” By today’s standards, this translates to something more like: it’s probably a good idea to make your money work for you in the here and now. That’s a lesson wealthy Americans seem to be coming to terms with, according to a survey commissioned by PNC Financial Services Group.

PNC asked Harris Interactive to conduct an online survey in October and November 2005 among a nationwide cross section of 1,485 adults age 18 or over with annual employment incomes of $150,000 or more, and at least $500,000 in assets. They also polled retirees with $1 million or more in assets. What the researchers found was that nearly half of the respondents, or 47 percent, reported that providing for their health and wellness is their chief financial concern. Despite their obviously solid financial footing, those surveyed proved that people everywhere are recognizing the fact that medical expenses and long-term care costs are a major threat to financial security for themselves and their families.

The survey also uncovered just how significant a threat these respondents viewed long-term care costs. More than one-third of those polled, or 35%, felt that long-term care costs and expensive medical treatment were a “threat or huge threat.”  Oddly enough, although these wealthy Americans realize the vulnerable position future health care needs place them in, few have made any real attempt at planning for the eventuality. The survey showed that twenty-two percent of those with living parents worry about their parents’ lack of long-term care insurance. In fact, 70% of those responding said that they had not purchased long-term care for themselves or their spouse because they didn’t want to pay premiums for a policy they may never use.

A significant factor that may be contributing to this mind set is the result of a practice used by wealthy parents for some time now that helped their children care for them if they required long-term care. In the past, parents transferred all their assets to their children. This strategy not only protected the assets, but also made the parents eligible for Medicaid. Parents can still do this, but it’s not as simple a transfer as it once was.

Currently, if an individual wants to transfer assets to become eligible for federal assistance, they must do so within three years of becoming eligible. However, a new law that took effect on February 8, 2006 makes it more difficult to qualify by just giving your money away. Individuals will now have to transfer assets within five years of entering a nursing home to qualify for Medicaid. Each state has the option of implementing the new rules according to its own timetable.

The implications of this new law include having to prove that money was given away innocently, meaning that it wasn’t transferred for the sole purpose of making the individual eligible for Medicaid. Although there are Medicaid hardship waivers, claimants will have a hard row to hoe to prove they qualify.

The new law will change the start of the penalty period for an individual who has transferred assets from the date the transfer was made to the date they applied for Medicaid. The law may also penalize family transactions that have occurred over time, especially if the individual hasn’t kept accurate records, by increasing the look back period from three to five years. The outcome of all of this additional tightening, according to the Congressional Budget Office, is that 120,000 people, or approximately 15% of new Medicaid applicants, will be delayed eligibility each year. In light of this new development, it seems that the most prudent course of action is providing for your own needs with a sound long-term care insurance policy. Call us today 800–240–3390 to learn about a policy that is right for you.