Finance Friday: True Cost of ‘Healthy’

I have been very sick the past few weeks. While I fortunately have not had to be hospitalized or anything like that I have had to miss a lot of work (due to illness or doctors appointments) and yesterday I had to have a minor outpatient procedure. Unfortunately, the diagnosis remains unknown.

However, I almost suffered a major heart attack when I got word of my insurance deductible: $500!!! I was literally brought to tears. They couldn’t proceed with my scheduled procedure until my heart stopped racing so fast. They were so concerned about my heartbeat that they had to perform a few unplanned tests before they could even proceed with what I was there for. The only consolation was that I didn’t have to pay the full amount then, I could be billed for the remaining balance.

Was this suppose to ease my anxiety? I’m already in the process of paying down my credit card debt, repaying student loans, and maintaining a roof over my head. Now this.

How many times have you heard people say that they cannot afford to get sick.

But it isn’t your wallets that should be at the forefront of your concern. Your health should always come first. Right?

Now I have an account for just about everything but health related expenses. And my job does not offer anything like a Health Savings Account, where I would be able to set aside money for just this purpose. I’m seriously considering whether it would be beneficial for me to open some sort of savings account OR to roll healthcare into my emergency fund.

Does this situation constitute dipping into savings?

Congratulations to Miss Gaga! Her new album, Born this Way, is projected to sell 1 million copies in its first week. So money!

AND, do not forget to honor this Memorial Day Weekend for its original purpose: Thank You to all of those that have served and continue to serve our country.

Finance Friday: Gifts for Graduates

I remember it well. June 13th, my graduation day from college. Having spent five years being taught how to think and then learning to think for yourself graduating from college is like your Dad taking the training wheels off your two speed overnight.

You were used to dime diving – ya know searching through the couch cushions in the student lounge to collect coins for your laundry. While you didn’t make much you made due. You always found enough money to go shopping, go dancing, and oh yea, go out eating.

But unfortunately, that “Real World” you kept hearing them refer to is rampant with due dates (past due dates), minimum payments and balances, fees and grace periods that expire after six months. Instead of buying flowers for the graduate in your life consider preparing them for the financial world they cannot hide from – no matter how many times they hit the proverbial snooze button.

I’ve stated before that I knew absolutely NOTHING about personal finance when I entered college. Not only did I graduate with a Roth IRA, a funded emergency fund and savings account, and a debt free week long stay in Panama, but was also able to purchase my first home at age 23. I attribute my enlightenment to one book: Rich Dad, Poor Dad by the Godfather of passive income, Robert Kiyosaki.

If you can get your graduate to do nothing else, I highly recommend you force this upon them – then let them make their own decision about how to proceed. The Godfather very simply talks about his upbringing and the influences that helped shaped his vision from his friends dad (Rich Dad) and his biological father (Poor Dad).  He introduced me to the concept of “passive income” and “making your money work for you”. I can say without a doubt, this book changed my life!!!!!

My other recommendation demonstrates a practical viewpoint of implementation. A semi-recent graduate himself, Ramit Sethi discusses in his book and blog by the same name, I Will Teach You To Be Rich, how young professionals can earn more, invest more, and do it all rather easily. He hates most financial advice and I hate some of his advice, but I give credit where credit is due: 90% of his material is absolutely valuable.

While he feeds off some stereotypes (especially in his Indian culture) he offers concrete advice as it relates to the psychology of individuals and why most people behave they way they do. The one thing that I took away from Ramit was the simplicity of automation, as I discuss here. Master this and you never have to worry about managing your finances again!

These weren’t books that anyone in my family suggested to me – or even could suggest to me. It was pure fate that brought me to these two gems. The goal isn’t to get your graduate to implement every single piece of information but rather to get them to be aware and start to think about these things. Have start early, so they don’t finish late!

Editorial note: And no I don’t think I’m slick I realize I’m posting Finance Friday on a Saturday…my bad!

Finance Friday: ‘I Do’, but…

The Duke and Duchess of Cambridge

I started this post during the royal wedding craze and was inspired by the ceremony and spiritual meaning behind the joining of two lives – but more so by the extravagant arrangements and jaw dropping costs. Reports estimate the royal wedding costs anywhere from $30 million to $70 million, with Brits footing the bill for security.  With an average US wedding costing close to $30,000 – peanuts to The Duke and Duchess I’m sure – most couples spend their honeymoon phase paying for that one special day.

Tia Mowry and Cory Hardrict

Ramit Sethi of I Will Teach You To Be Rich  suggests a foreign concept in his book by the same name (see Chapter 9: A Rich Life). Start to save for your wedding as soon as possible. Whether you are single or engaged, on the hunt or playing the field, if marriage is something you eventually see for yourself, why not start saving for the day now. I am willing to put in the upfront  leg work to have the wedding my future husband and I want. OK– I tried to include him but let’s be real, the wedding I want.

New Parents: Mariah Carey and Nick Cannon

This isn’t Project Husband, where you plan a wedding without a partner. But the concept and application of saving for your wedding as oppose to daydreaming about it will allow you the freedom to have the wedding your budget can afford. Heck! Saving now will allow you to have the wedding you might not otherwise be able to afford!

Say at eighteen you started putting away $50/month in a measly saving account earning you 2%. By twenty you’ve saved  $1,275.56. Wedding cake? Check!

Now say you continue to save another five years while you meet and fall for the guy of your most dreamiest dream. You’re earning  more so you increase your monthly saving amount to $100.

Final Savings Balance: $7,718.53

Ummm, looks like you have options when it comes to your wedding dress. Maybe even go to Kleinfelds for a private fitting. At twenty-five you have personally saved a significant amount for your big day. But because hubby-to-be is THE one he is on board with the luxe savings plan and decides to contribute too. You two are saving $300 month at a higher interest rate. By thirty, you would have saved:

Final Savings Balance: $29,386.29

LaLa Vasquez & Carmelo Anthony

LaLa Vasquez & Carmelo Anthony

Some of you may find this strange, unrealistic, time-consuming, blah, blah, blah. But you will be one of those people who overspends, overcharges or has to make those seemingly tough cuts to control costs. If you think you cannot afford to save now, how will you afford to spend later?

As a married couple your lives will be filled with many special days. Hopefully each one doesn’t cost you a fortune. But if you begin to really plan (and by plan, I mean save) for you big day, the result will be “a wedding where, the day after, you’re debt-free and can start your lives together“.

Shania Twain and Frédéric Thiébaud

For a simple savings calculator, click here.

P.S. It is really tough to find celeb wedding photos were the couple is still together…

Finance Friday: Fasting & Binging

And no I don’t mean on food!

Fashion bloggers across the webishphere are embarking on personal challenges to control their spending and overflowing closets with the realization that the more pieces they accumulate the deeper they went into financial debt.

There are bloggers who only wear high end pieces and I wonder how they could afford such a wardrobe and others that acknowledge they currently cannot afford luxury designers but are fashionable nonetheless. Generally speaking, we all subscribe to a mixture of both. One for inspiration and the other for practical application. The question isn’t only “Where’d You Get That?” but “How’d You Pay For THAT?”, something that often is left unsaid.

These days not only are we envious of the Joneses but we invite them into our homes. The Joneses  are online and have created a host of websites showcasing their latest finds. They tell us exactly what they are wearing, how much it cost and where to buy one just like it. Sometimes they direct us to the lower priced option. Nonetheless we feel pressured to be just like them.

I too suffered from closet envy which led me to charge up my credit card (at one point I was free of the C3’s). I’ve since recovered and no longer feel such pressure but I relapse from time to time. I hadn’t been shopping in a while. With my new job, my pay schedule changed and I wanted to get use to it – making sure all my bills are paid on time – before I started spending. Well… it all started with these babies:

Alloy - Sayla Oxford

…and then went down hill from there with these (this is the short list):

French Connection - Fast Dandy Voile Dress

Laudme - Josephine Baker Elephant Tank

ASOS Striped Midi

Vince Camuto Mista Platform Stiletto Pumps

It’s like Christmas to me — but the feeling doesn’t last long. I tear open the boxes and included packaging and proceed with an impromptu fashion show. In the past as soon as the show ended, I started to feel regret for the debt I just incurred and for purchasing  three dresses of the same style in different colors (pick one!). I felt B.R.O.K.E (Buyers Remorse Over K-rappy Expenses)!

My shopping binge lasted only three days and was done completely online. I did NOT use any of my credit cards. I paid for it all using money I had saved just for this purpose (more next week).

I believe these diets, challenges and fasts would not work for me. In the past, they have not worked for me.  Some people have children, hobbies and other things to focus their energy on (?), I have style. Not just fashion, but “style”  – encompassing all things personally attractive to me. I get just as much pleasure out of shopping for clothing and accessories as I do perusing the aisles of Lowes and Ikea.

Maybe you need to purge and fast first. I commend each blogger for (1) acknowledging they have a problem, (2) acknowledging they have bigger goals then being trendy at the moment, (3) for doing something about it, and (4) for going public with it.

"Finance & the Fashion Blogger: Ignore-ance" by Miss Ashe Mischief

Here at MNM, we believe that a woman can have it all! Manolos & Mutual Funds! And with some understanding of your financial style and a few easily coordinated steps you can. Some things to remember are there is no one size fits all financial tip. Your money is not that of your favorite fashion blogger. We shall not judge.

Read more about each of these challenges here:

Please feel free to list any other challenges out there!

Good luck Missy!

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