There have been a few occasions in which I have seen an opportunity to take a freelance position or start a small business, and have avoided it precisely because of the costs of healthcare. As a diabetic, I simply won't be insured by individual health plans.
It remains to be seen how many Americans will leave their current jobs to start their own businesses once health care companies are forced to stop denying coverage to people, but I think there will be a definitely upswing.
I am also self-employed. My insurance is my single biggest risk, and the one thing that could get me to close up shop completely. Many of my friends would like to start their own businesses, but to now have been uninsurable, so cannot. Think about that - people cannot change jobs to work for small business, cannot start small businesses, because they cannot get health care coverage. Does that make any economic sense at all? It's a killer to entrepreneurship.
As for the idea that health is totally controllable...well, no. I am healthy, thin, exercise, don't smoke, don't take meds, have healthy parents who also don't take meds...and yet - I needed emergency surgery out of the blue two years ago. And now I am uninsurable so I am stuck and cannot comparison shop. Issue is resolved, it will not reoccur. yet I cannot be insured and am stuck with what I have. If it becomes unsustainable I will close my business and get a job with the Feds, who have great benefits.
What we have now is an economic stranglehold to small business. These reforms are better, but only marginally. We need something more comprehensive.
Zillions of people are chained to jobs they hate because they need health care. Now, they can go out and do their own thing! This is the best economic news we've had in forty years.
Health is not a right. It is a personal responsibility. Health care is not a right. It is a commodity. Health insurance is not a right. It is a financial risk management tool. ObamaCare is going to bankrupt our nation.
Agree or disagree, Philip has written a thoughtful and articulate post that (thus far) has sparked an intelligent discussion. I hope we can continue to have these.
When I was in my early 20s, the only insurance I could afford was emergency coverage only; many of my friends had it. The simple act of allowing people up to age 26 to stay on a parent's plan, instead of opting for emergency-only coverage, will encourage people who are used to seeking preventative care to continue to do so. This = fewer serious illnesses that could have been nipped in the bud (flus that become pneumonia, strep, etc, not to mention cervical cancer in women).
This is a complicated package and it's safe to say that no one is 100% happy with it. Let's keep the discussion going!
Phil, thanks for writing this article. Health care reform is important and what we have is at least a step in right direction. This country was total paralyzed trying to write a bill to please everyone which is statistically impossible if the bill is to have any specifics in it.
I disagree with Olivia and I agree with C Holland. This bill should not lead to people being less proactive about their health. Just the opposite. The debate around this bill has focused the importance on individual responsibility. At the same time, if you have a preexisting condition once the teeth of the bill kick in, you will not have to worry about being turned down for coverage. The bill is a start toward a cultural change in the U.S. that focuses on everyone taking more responsibility for their own health with the knowledge that they will have affordable health insurance if they need it.
You may well be right about the new law raising premiums. You may be wrong—pulling in all the healthy people in may well bring the average premium down more than covering sick people pushes it up—but there's no guarantee of that.
Of course you're already paying a lot of that money, even if you're not paying it for health insurance. You're paying it via taxes and you're paying it via hugely inflated health care bills, because those uninsured sick people are already getting care, they're just getting it at the emergency room with the hospital and the government eating the cost.
But that's all beside the point. I'm willing to pay for my health insurance, even if it's more expensive. Tell me what my health insurance is going to cost and I'll arrange my finances to pay it. (I'd even go back to working a regular job, if that's what it took.) What I rebel against is the huge gamble where healthy people get slightly cheaper insurance while sick people get hit with charges that only the wealthiest 5% could pay (assuming that their insurance isn't simply canceled out from under them).
I have watched this healthcare issue closely as I am self-employed and pay for my own insurance and wonder what the future holds. I would like to think your post will happen, but I am not sure if it will or not. Personally I believe that individuals need to be held more accountable for their lifestyle choices (including food, exercise and smoking)and we could eliminate billions of dollars in healthcare costs.
I suspect that we can all agree with Olivia that an emphasis on preventative care is desirable; however, I don't see how the reforms that are passed preclude a focus on preventative care. I also don't buy the idea that people will stop caring about staying well if you increase their access to health care -- it seems to me that the opposite is true -- it makes it more possible for them to do so. While I think we are all motivated to some extent to improve our health because we are afraid of getting sick, I doubt that there's much of a correlation between the cost of getting sick and the motivation to stay well. In other words, I suspect that the other aspects of being ill -- feeling cruddy, not being able to accomplish as much, diminished capacity to enjoy life -- far outstrip the financial aspects as motivators to look after one's health.
What has me shouting "Alleluia, amen!" about the health care changes is the decoupling of individual financial fortune from health misfortune -- I think that Phil nails it on the head when points out how this reform will make it more palatable for an entrepreneur to take a calculated financial risk. Thanks for another great post!
Education is not FREE. I pay property taxes to the tune of paying for 9 weeks of "free" education for SOMEONE ELSE'S CHILD each year and I have no kids of my own. This "I get something, for nothing" illogical thinking in the country is what will doom us, and once 51% of voters that actually go to the ballot are on this same "it's free, the government is buying - so I'll have two of those, thanks" it will all be downhill even faster . . . good luck with that MOOCHERS
Phillip, I believe you are wrong. I won't get into particulars but I think this is a bill written for and by insurance companies (given the current political climate this is the best they could get) and is in fact bailout #1 (30m new, healthy, paying customers). Bailout #2 will come when they plead poverty due to having to actually cover sick people (that is above their pay grade).
Every other industrialized country has solved the problem and we can just copy ANY ONE OF THIER SYSTEMS and we'd better off by dropping our costs 50% and COVERING EVERY SINGLE AMERICAN. But NO! Let's re-invent the wheel "American exceptionalism" and neo-liberal fantasies of perfect markets--even though there is not one single example of markets fixing health care anywhere in the entire world. And you say your're optimistic?
Even if they fail, they're still be able to do better than the current state of Healthcare now. I don't understand all these 'what-ifs' that people have. We had the same 'what-ifs' about slavery, about child workers, and about free education.
You might even complain that the current American education system is screwed up. But private schools still exist. And lower class families still get to provide their children with an education.
I completely disagree with your post. Now, this is coming from somebody who is married to a farmer and will most likely have to pay for individual health insurance (not group insurance) for her entire life.
First of all, I think that this health insurance reform will only RAISE health premiums--not lower them. How in the world can insurance companies keep premiums low if they have to cover everyone including those with pre-existing conditions? Sure, the idea sounds nice, but the cost to the company is going to skyrocket. They will be left with no other option than to raise premiums or go out of business.
Secondly, Medicaid and Medicare are going bankrupt. Obviously, the system isn't working and continuing it will only hurt things.
Finally, the regulations placed on businesses regarding providing health insurance are going to substantially raise costs for businesses. Many companies have already come forward projecting astronomical losses because of this bill. If these losses actually develop, more jobs will be lost and will make it even more difficult for people to afford health insurance.
Look, I agree that the health care system needs fixed, but this is just not the way to do it. A personal finance blogger ought to be aware of that. This plan just doesn't make financial sense. Instead, health care costs need to be lowered from the ground up. A stronger focus needs to be placed on preventative medicine and something needs to be done about the excessive lawsuits doctors are forced to face.
Don't let yourself be fooled by these attractive claims like not being able to deny coverage for pre-existing conditions. Overall, this bill is ruinous and will worsen the situation.
Whilst I oppose this health plan because I think it will cause econimic misery for the country and be mismanaged, I believe that your argument is one of the best I've seen for it.
I've been part of similar events where you bring good stuff that just isn't useful to you and items are sold or auctioned off as a "white elephant" sale / fund-raiser rather than an exchange. But the swap meet party sounds like fun, a great excuse for a party, and an excellent way to save money.
I agree that living on 50% of income a great way to live -- the problem for most people is getting there, which usually translates to getting out of debt. So let's talk about how to get rid of debt:
(1) Tackle debt the slow and hard way by systematically getting rid of it with frugal choices -- make this #1, work at it with intensity, & be willing to make some sacrifices (hard, but not necessarily permanent choices) to get there: Maybe I can't go 5 years without replacing the doggy old slow computer that is still limping along, but if it means getting the car payment off my back 2 to 6 months earlier, I can wait another 6-18 months. I'm re-framing my sacrifice so that I can see to the end of getting the car paid off and getting a new computer instead of thinking of it as being stuck with the doggy computer "practically forever".
(2) Even if Dave Ramsey's persona or politics make you cringe (I cringe!), he's right about the car, the garage/Craig's List/whatever sale, and the second job. These are all things that you can do to bomb debt. The pain they impose is temporary -- like the burn you feel while you peddle your bike up a steep hill -- and SOOO worth it when you are over the hump and on the downhill coast. My father was a big believer in letting someone else take the first few years of depreciation on a car and we've been paying cash for used cars for about 15 years now, driving each for 7 years or more -- your starter car on this system might be a junker that you only drive for a year or two so that you can put aside enough to get something better, but once you get this snowball rolling, the thousands in savings mount up very quickly.
(3) Buy as little house as you can make work. Don't put lots of expensive square footage on credit -- a.k.a. "a mortgage". Consider the return on sweat equity. For example, get less house but with a basement, attic, or garage that equals expansion potential and wait until you can dribble cash into it -- even if you are paying someone else to do the work. The pain of dribbling will serve as a further disincentive to overbuying.
If you have a big house, make it smaller. If you have more home than you need and are not ready to sell, consider whether your home is one that could be rented while you lived someplace cheaper. Consider opening a larger home to a renter or a family member who can help foot the bills (Phil Brewer writes about this).
(4) Keep paying off the mortgage on the radar. Consider how much closer to saving 50% you would be without a house payment. Figure out how little the mortgage income tax deduction is really worth (it's not the amount of interest v.s. principle that you shell out each month, but a percentage of it -- compare that actual number to the number you are actually shelling out each month -- yes, the deduction helps, but how many bucks are you spending to save a nickle?) Consider a 15 year fixed rate mortgage. Consider paying a 30 year mortgage like it's a 15 year mortgage. Consider putting any windfall money on the house.
Personal story: Back in the day, worked for a computer company that gave me stock options -- listened to the pie-in-the-sky "we'll go public & all be millionaires" talk & said to myself, if I can just make enough to pay off a house some day, I'll be happy. Exercised options when left company. 15 years after getting first "potentially valuable" (but for 15 years never worth anything because there was no market for it) option, the company was sold. Paid off house on proceeds (had in the meantime bought a modest house & expanded as we had the money). Windfall alone was not what got us there -- had been whittling at that 30 year mortgage as if it was a 15 year mortgage -- and had about 50% of the original loan amt to go when we got our windfall.
The best part came when my husband was laid off in December of 2008. Worst economic situation & real estate markets this country had seen in our lifetimes and we did not have to worry about losing the house. We sweated the COBRA payment, but we are not on the lists of foreclosed. Note that our strategy was not to "cash out on our stock" but to get out from under the house as soon as we could and we used multiple strategies to get there. We kept paying the house off on the radar.
(And, after a 9 month hiatus, my husband is now working, with health insurance, again.)
5) You can actually enjoy getting there! We've felt tremendous satisfaction as we've shed each millstone. Don't minimize this -- revel in it & use it to fuel you to tackle the next peak!
Our most recent millstone? Some "convenience" credit card debt my husband incurred prior to the job loss (it was so easy to whip out the card since there wasn't enough in the billfold, and anyway, we had the money in the bank...). I've been going cardless for well over 2 years now (one lapse burned my fingers) and I think this episode has convinced my husband to do the same. He put all the credit cards next to my debit cards in the safe deposit box over the weekend.
We have just become 100% debt free and it has freed up 50% of our income for savings. It can be done!
P.S. I recognize that our access to health insurance has been a critical support for us in our modest "success story", and I pray that we as a nation will embrace those changes in the structure of the health care system that have the potential to wipe out health care crises as a cause of economic devastation for American families. I speak here as a sister who has seen a health care crisis destroy the finances of her brother's family. With gratitude for being out of the hole & able to help again . . .
I especially liked your reference to sensation-stimulating nights out. I love to see a good movie but I find when I see one I want to see another and another and another...the movie is great on the night but even having recently seen Avatar in 3D...well actually, I'm over it already and can't imagine me thinking back to it as anything truly invigorating...I think I will remember the Jaffas more than the movie, lol! I can still enjoy a good film but I can see how I could easily spend spend spend when there are plenty of other alternative experiences to enjoy.
I don't think so if you buckle down and get smart with your finances. My wife and I live on 50%, invest 25% toward retirement, and save the other 25% in cash for non-retirement investments. You just have to make the right choices and get things in check to live this way. I know it may be hard for some, but for those of us who do it, it's a great way to live!
I'm glad the writer found items that work for her.
But for some of us, who work in the corporate world, we need decent suits (pants and otherwise). Finding well-tailored (and affordable) suits is very hard when you're both short (5 foot 3 inches) and busty and large.
Most of the stuff that's out there looks ludicrous on women of my size (and there are many around). The stuff at places like Lane Bryant and FashionBug is cheaply made and horribly styled (for the most part).
Some of us have very sophisticated (translation: Simple lines, great fabrics, great tailoring) taste and there is virtually nothing out there.
Retro and vintage are great for accessories, but not for clothes.
There is a huge opportunity for both designers and stores, but very few stores (regular ones) want to stock for larger sizes. They really don't want to be associated with large women. They don't want to see them shopping in their stores (no problem; you can't stock clothes for my size? I won't buy ANYTHING in your stores.)
After reading all of your comments, I had one thought. I want to loose weight and keep it off but like most people I am not quite sure what to do first. I understand that you need to make healthier choices and to exercise but that is not always easy, especially for someone that has never really done those things. My problem is that I am a picky eater. I don't eat a lot of meats or veggies due to veggies being flavorless or due to the texture of the meat. I find myself adding butter to my vegetables to make them taste better and drenching my salads in my dressing and I don't like steak, ribs, roasts, etc. For meats I mostly eat chicken, pork and hamburger. I am not sure how to flavor my food with herbs for the healthier choice. I am not great a cooking but not horrible. How do you make these changes, as far as what kind of herbs do you use an how to cook for a picky eater like me. I am new to this way of life. In the past I would loose weight by taking diet pills only to put they weight back on. I am frustrated and depressed by my weight gain. It not only affects my but everyone around me. I am just at a loss on what to do to loose my weight and keep it off.
I also put on a swap meet party after reading the article in Better Homes and Gardens. It was great fun! Each person could bring up to ten items and of course they needed to be clean and in good shape. We had everything from dishes to never used lotions and make-up. I ended up with a new cookbook, a devotional book, some make-up and a beautiful candle holder. It was a great way to go "shopping" without spending a dime.
All in all, a great reason to get together and have some fun!
There have been a few occasions in which I have seen an opportunity to take a freelance position or start a small business, and have avoided it precisely because of the costs of healthcare. As a diabetic, I simply won't be insured by individual health plans.
It remains to be seen how many Americans will leave their current jobs to start their own businesses once health care companies are forced to stop denying coverage to people, but I think there will be a definitely upswing.
So if your car depreciates in value after you purchase it, you should just stop making loan payments?
Your "lecture" worse than anybody else's
I am also self-employed. My insurance is my single biggest risk, and the one thing that could get me to close up shop completely. Many of my friends would like to start their own businesses, but to now have been uninsurable, so cannot. Think about that - people cannot change jobs to work for small business, cannot start small businesses, because they cannot get health care coverage. Does that make any economic sense at all? It's a killer to entrepreneurship.
As for the idea that health is totally controllable...well, no. I am healthy, thin, exercise, don't smoke, don't take meds, have healthy parents who also don't take meds...and yet - I needed emergency surgery out of the blue two years ago. And now I am uninsurable so I am stuck and cannot comparison shop. Issue is resolved, it will not reoccur. yet I cannot be insured and am stuck with what I have. If it becomes unsustainable I will close my business and get a job with the Feds, who have great benefits.
What we have now is an economic stranglehold to small business. These reforms are better, but only marginally. We need something more comprehensive.
What is the proper way to clean copper pipeing and how often should the pipeing be cleaned?
Zillions of people are chained to jobs they hate because they need health care. Now, they can go out and do their own thing! This is the best economic news we've had in forty years.
Health is not a right. It is a personal responsibility. Health care is not a right. It is a commodity. Health insurance is not a right. It is a financial risk management tool. ObamaCare is going to bankrupt our nation.
Agree or disagree, Philip has written a thoughtful and articulate post that (thus far) has sparked an intelligent discussion. I hope we can continue to have these.
When I was in my early 20s, the only insurance I could afford was emergency coverage only; many of my friends had it. The simple act of allowing people up to age 26 to stay on a parent's plan, instead of opting for emergency-only coverage, will encourage people who are used to seeking preventative care to continue to do so. This = fewer serious illnesses that could have been nipped in the bud (flus that become pneumonia, strep, etc, not to mention cervical cancer in women).
This is a complicated package and it's safe to say that no one is 100% happy with it. Let's keep the discussion going!
Phil, thanks for writing this article. Health care reform is important and what we have is at least a step in right direction. This country was total paralyzed trying to write a bill to please everyone which is statistically impossible if the bill is to have any specifics in it.
I disagree with Olivia and I agree with C Holland. This bill should not lead to people being less proactive about their health. Just the opposite. The debate around this bill has focused the importance on individual responsibility. At the same time, if you have a preexisting condition once the teeth of the bill kick in, you will not have to worry about being turned down for coverage. The bill is a start toward a cultural change in the U.S. that focuses on everyone taking more responsibility for their own health with the knowledge that they will have affordable health insurance if they need it.
@ Olivia:
You may well be right about the new law raising premiums. You may be wrong—pulling in all the healthy people in may well bring the average premium down more than covering sick people pushes it up—but there's no guarantee of that.
Of course you're already paying a lot of that money, even if you're not paying it for health insurance. You're paying it via taxes and you're paying it via hugely inflated health care bills, because those uninsured sick people are already getting care, they're just getting it at the emergency room with the hospital and the government eating the cost.
But that's all beside the point. I'm willing to pay for my health insurance, even if it's more expensive. Tell me what my health insurance is going to cost and I'll arrange my finances to pay it. (I'd even go back to working a regular job, if that's what it took.) What I rebel against is the huge gamble where healthy people get slightly cheaper insurance while sick people get hit with charges that only the wealthiest 5% could pay (assuming that their insurance isn't simply canceled out from under them).
I have watched this healthcare issue closely as I am self-employed and pay for my own insurance and wonder what the future holds. I would like to think your post will happen, but I am not sure if it will or not. Personally I believe that individuals need to be held more accountable for their lifestyle choices (including food, exercise and smoking)and we could eliminate billions of dollars in healthcare costs.
I suspect that we can all agree with Olivia that an emphasis on preventative care is desirable; however, I don't see how the reforms that are passed preclude a focus on preventative care. I also don't buy the idea that people will stop caring about staying well if you increase their access to health care -- it seems to me that the opposite is true -- it makes it more possible for them to do so. While I think we are all motivated to some extent to improve our health because we are afraid of getting sick, I doubt that there's much of a correlation between the cost of getting sick and the motivation to stay well. In other words, I suspect that the other aspects of being ill -- feeling cruddy, not being able to accomplish as much, diminished capacity to enjoy life -- far outstrip the financial aspects as motivators to look after one's health.
What has me shouting "Alleluia, amen!" about the health care changes is the decoupling of individual financial fortune from health misfortune -- I think that Phil nails it on the head when points out how this reform will make it more palatable for an entrepreneur to take a calculated financial risk. Thanks for another great post!
Education is not FREE. I pay property taxes to the tune of paying for 9 weeks of "free" education for SOMEONE ELSE'S CHILD each year and I have no kids of my own. This "I get something, for nothing" illogical thinking in the country is what will doom us, and once 51% of voters that actually go to the ballot are on this same "it's free, the government is buying - so I'll have two of those, thanks" it will all be downhill even faster . . . good luck with that MOOCHERS
Phillip, I believe you are wrong. I won't get into particulars but I think this is a bill written for and by insurance companies (given the current political climate this is the best they could get) and is in fact bailout #1 (30m new, healthy, paying customers). Bailout #2 will come when they plead poverty due to having to actually cover sick people (that is above their pay grade).
Every other industrialized country has solved the problem and we can just copy ANY ONE OF THIER SYSTEMS and we'd better off by dropping our costs 50% and COVERING EVERY SINGLE AMERICAN. But NO! Let's re-invent the wheel "American exceptionalism" and neo-liberal fantasies of perfect markets--even though there is not one single example of markets fixing health care anywhere in the entire world. And you say your're optimistic?
?????
Even if they fail, they're still be able to do better than the current state of Healthcare now. I don't understand all these 'what-ifs' that people have. We had the same 'what-ifs' about slavery, about child workers, and about free education.
You might even complain that the current American education system is screwed up. But private schools still exist. And lower class families still get to provide their children with an education.
Now replace the word education with Healthcare.
I completely disagree with your post. Now, this is coming from somebody who is married to a farmer and will most likely have to pay for individual health insurance (not group insurance) for her entire life.
First of all, I think that this health insurance reform will only RAISE health premiums--not lower them. How in the world can insurance companies keep premiums low if they have to cover everyone including those with pre-existing conditions? Sure, the idea sounds nice, but the cost to the company is going to skyrocket. They will be left with no other option than to raise premiums or go out of business.
Secondly, Medicaid and Medicare are going bankrupt. Obviously, the system isn't working and continuing it will only hurt things.
Finally, the regulations placed on businesses regarding providing health insurance are going to substantially raise costs for businesses. Many companies have already come forward projecting astronomical losses because of this bill. If these losses actually develop, more jobs will be lost and will make it even more difficult for people to afford health insurance.
Look, I agree that the health care system needs fixed, but this is just not the way to do it. A personal finance blogger ought to be aware of that. This plan just doesn't make financial sense. Instead, health care costs need to be lowered from the ground up. A stronger focus needs to be placed on preventative medicine and something needs to be done about the excessive lawsuits doctors are forced to face.
Don't let yourself be fooled by these attractive claims like not being able to deny coverage for pre-existing conditions. Overall, this bill is ruinous and will worsen the situation.
I am all for improving health care. But a federal takeover is not the way to do it. The feds ruin anything they touch. Social security comes to mind.
http://republicanleader.house.gov/News/DocumentSingle.aspx?DocumentID=13...
Philip:
Whilst I oppose this health plan because I think it will cause econimic misery for the country and be mismanaged, I believe that your argument is one of the best I've seen for it.
too bad im not from us and the info doesnt apply to me... well, better look for frequent miles stuff for non us citizens like me
:-)
I've been part of similar events where you bring good stuff that just isn't useful to you and items are sold or auctioned off as a "white elephant" sale / fund-raiser rather than an exchange. But the swap meet party sounds like fun, a great excuse for a party, and an excellent way to save money.
I agree that living on 50% of income a great way to live -- the problem for most people is getting there, which usually translates to getting out of debt. So let's talk about how to get rid of debt:
(1) Tackle debt the slow and hard way by systematically getting rid of it with frugal choices -- make this #1, work at it with intensity, & be willing to make some sacrifices (hard, but not necessarily permanent choices) to get there: Maybe I can't go 5 years without replacing the doggy old slow computer that is still limping along, but if it means getting the car payment off my back 2 to 6 months earlier, I can wait another 6-18 months. I'm re-framing my sacrifice so that I can see to the end of getting the car paid off and getting a new computer instead of thinking of it as being stuck with the doggy computer "practically forever".
(2) Even if Dave Ramsey's persona or politics make you cringe (I cringe!), he's right about the car, the garage/Craig's List/whatever sale, and the second job. These are all things that you can do to bomb debt. The pain they impose is temporary -- like the burn you feel while you peddle your bike up a steep hill -- and SOOO worth it when you are over the hump and on the downhill coast. My father was a big believer in letting someone else take the first few years of depreciation on a car and we've been paying cash for used cars for about 15 years now, driving each for 7 years or more -- your starter car on this system might be a junker that you only drive for a year or two so that you can put aside enough to get something better, but once you get this snowball rolling, the thousands in savings mount up very quickly.
(3) Buy as little house as you can make work. Don't put lots of expensive square footage on credit -- a.k.a. "a mortgage". Consider the return on sweat equity. For example, get less house but with a basement, attic, or garage that equals expansion potential and wait until you can dribble cash into it -- even if you are paying someone else to do the work. The pain of dribbling will serve as a further disincentive to overbuying.
If you have a big house, make it smaller. If you have more home than you need and are not ready to sell, consider whether your home is one that could be rented while you lived someplace cheaper. Consider opening a larger home to a renter or a family member who can help foot the bills (Phil Brewer writes about this).
(4) Keep paying off the mortgage on the radar. Consider how much closer to saving 50% you would be without a house payment. Figure out how little the mortgage income tax deduction is really worth (it's not the amount of interest v.s. principle that you shell out each month, but a percentage of it -- compare that actual number to the number you are actually shelling out each month -- yes, the deduction helps, but how many bucks are you spending to save a nickle?) Consider a 15 year fixed rate mortgage. Consider paying a 30 year mortgage like it's a 15 year mortgage. Consider putting any windfall money on the house.
Personal story: Back in the day, worked for a computer company that gave me stock options -- listened to the pie-in-the-sky "we'll go public & all be millionaires" talk & said to myself, if I can just make enough to pay off a house some day, I'll be happy. Exercised options when left company. 15 years after getting first "potentially valuable" (but for 15 years never worth anything because there was no market for it) option, the company was sold. Paid off house on proceeds (had in the meantime bought a modest house & expanded as we had the money). Windfall alone was not what got us there -- had been whittling at that 30 year mortgage as if it was a 15 year mortgage -- and had about 50% of the original loan amt to go when we got our windfall.
The best part came when my husband was laid off in December of 2008. Worst economic situation & real estate markets this country had seen in our lifetimes and we did not have to worry about losing the house. We sweated the COBRA payment, but we are not on the lists of foreclosed. Note that our strategy was not to "cash out on our stock" but to get out from under the house as soon as we could and we used multiple strategies to get there. We kept paying the house off on the radar.
(And, after a 9 month hiatus, my husband is now working, with health insurance, again.)
5) You can actually enjoy getting there! We've felt tremendous satisfaction as we've shed each millstone. Don't minimize this -- revel in it & use it to fuel you to tackle the next peak!
Our most recent millstone? Some "convenience" credit card debt my husband incurred prior to the job loss (it was so easy to whip out the card since there wasn't enough in the billfold, and anyway, we had the money in the bank...). I've been going cardless for well over 2 years now (one lapse burned my fingers) and I think this episode has convinced my husband to do the same. He put all the credit cards next to my debit cards in the safe deposit box over the weekend.
We have just become 100% debt free and it has freed up 50% of our income for savings. It can be done!
P.S. I recognize that our access to health insurance has been a critical support for us in our modest "success story", and I pray that we as a nation will embrace those changes in the structure of the health care system that have the potential to wipe out health care crises as a cause of economic devastation for American families. I speak here as a sister who has seen a health care crisis destroy the finances of her brother's family. With gratitude for being out of the hole & able to help again . . .
Great post Oleg, I really got a lot out of it.
I especially liked your reference to sensation-stimulating nights out. I love to see a good movie but I find when I see one I want to see another and another and another...the movie is great on the night but even having recently seen Avatar in 3D...well actually, I'm over it already and can't imagine me thinking back to it as anything truly invigorating...I think I will remember the Jaffas more than the movie, lol! I can still enjoy a good film but I can see how I could easily spend spend spend when there are plenty of other alternative experiences to enjoy.
Thanks for the practical tips!
I don't think so if you buckle down and get smart with your finances. My wife and I live on 50%, invest 25% toward retirement, and save the other 25% in cash for non-retirement investments. You just have to make the right choices and get things in check to live this way. I know it may be hard for some, but for those of us who do it, it's a great way to live!
I'm glad the writer found items that work for her.
But for some of us, who work in the corporate world, we need decent suits (pants and otherwise). Finding well-tailored (and affordable) suits is very hard when you're both short (5 foot 3 inches) and busty and large.
Most of the stuff that's out there looks ludicrous on women of my size (and there are many around). The stuff at places like Lane Bryant and FashionBug is cheaply made and horribly styled (for the most part).
Some of us have very sophisticated (translation: Simple lines, great fabrics, great tailoring) taste and there is virtually nothing out there.
Retro and vintage are great for accessories, but not for clothes.
There is a huge opportunity for both designers and stores, but very few stores (regular ones) want to stock for larger sizes. They really don't want to be associated with large women. They don't want to see them shopping in their stores (no problem; you can't stock clothes for my size? I won't buy ANYTHING in your stores.)
After reading all of your comments, I had one thought. I want to loose weight and keep it off but like most people I am not quite sure what to do first. I understand that you need to make healthier choices and to exercise but that is not always easy, especially for someone that has never really done those things. My problem is that I am a picky eater. I don't eat a lot of meats or veggies due to veggies being flavorless or due to the texture of the meat. I find myself adding butter to my vegetables to make them taste better and drenching my salads in my dressing and I don't like steak, ribs, roasts, etc. For meats I mostly eat chicken, pork and hamburger. I am not sure how to flavor my food with herbs for the healthier choice. I am not great a cooking but not horrible. How do you make these changes, as far as what kind of herbs do you use an how to cook for a picky eater like me. I am new to this way of life. In the past I would loose weight by taking diet pills only to put they weight back on. I am frustrated and depressed by my weight gain. It not only affects my but everyone around me. I am just at a loss on what to do to loose my weight and keep it off.
I also put on a swap meet party after reading the article in Better Homes and Gardens. It was great fun! Each person could bring up to ten items and of course they needed to be clean and in good shape. We had everything from dishes to never used lotions and make-up. I ended up with a new cookbook, a devotional book, some make-up and a beautiful candle holder. It was a great way to go "shopping" without spending a dime.
All in all, a great reason to get together and have some fun!