Saturday, August 04, 2007
Waiting for the New Year
Oh how I can't wait for 2008 to get here. Yes, we've still got some time to go to get there, but man am I ready.
Why, you ask?
More spare money to pay down debt.
How, you ask?
- I will be receiving a large check for tuition reimbursement from work. I expect this to be at least $2,000. They only pay 80% of your tuition to a max of $5,000 a year. I'm hoping to get all the paper work filed before 2008 so that it will count towards 2007 meaning I would still have the $5,000 to max out next year. While I debated about just putting that money directly back onto the student loans I had to use to go to school, I decided (through the help of some commentators on here) it would make more sense to pay off credit card debt that is at a higher interest rate. That pretty much makes it a balance transfer. I'll still be knocking out my debt as I normally do, this will only help. Once I get my credit card debt paid off, I'll have plenty of cash freed up to pay off the student loans.
- As of 01/12/2008, my wife's braces will be paid off. That will free up almost $200 every month. I'm debating on how to use that money. I want to put it towards her car payment and have her car paid off ASAP. But I also think it would serve a better purpose going towards our CC debt. I'm leaning towards the CC debt.
- With the new year comes renewal of benefits at work. I currently pay about $190 a month for a pretty good health insurance plan that covers the both of us. By pretty good, I mean that I've never received a letter from them saying they're denying me coverage for something as my previous health insurer did. I'm pretty sure the rates will go up, so I'm going to look into more plans this time. Last year, I just looked over this one and said sure I'll take it. I'll be looking into an HMO. I know, I know. Those are bad, right? But I do believe our current physician's are already used in the HMO. Should I go with the HMO plan, I could save about $100 a month on health insurance.
I'll also be able to change our contribution to our Health Care Spending Account. Currently, I contribute about $270 a month. Of course part of this is for the braces, but we're still paying that out of pocket and waiting to get reimbursed everything at the end of the year. Believe me, it has come in handy this year with the pregnancy and then miscarriage. If we didn't have the HCSA, we wouldn't have had the money to pay for it. I'm planning on taking the contribution down to about $100-125ish a month.
While our dental and vision insurance deductions might go up, they won't go up much. I currently pay about $35/month for the dental plan and $10 for the vision plan. That total of $45 may go up to $50. A $5 increase I can surely live with. - Almost forgot! I will be submitting reimbursement papers for the braces payments at the end of the year. I suspect about $700-800 will be left in the HCSA, so that will be another big chunk of debt that will be out of our way!!
Of course, the drop in pre-tax deductions on my paycheck will mean more taxes to pay. But that's ok. It shouldn't be that much of an increase.
So here's the summary:
$200 payment from braces will be no more
$150ish reduction in our HCSA contribution
$100 reduction in health insurance deduction(should I choose a different plan)
$350-450 more to put towards debt each month
That will put us at about $1,000 each month going towards debt.
Then with the tuition and HCSA reimbursement money, we'll have another $2,800-$3,000 to knock off more debt.
With all this freed up money, I really need to run the numbers to see when we'll be (at least CC) debt free!!!
Labels: benefits, debt, extra income, HCSA, health, pre-tax deductions
Tuesday, April 03, 2007
The Income.... that I never see
As I near my one year anniversary with the new company, I have now realized that I made the right decision to accept the job.
When I turned in my two weeks notice at my old job, I was asked how much it would take to get me to stay there. I was prepared for that and about a week before I had made a list of things that would be necessary for me to stay. I didn't bring any of it up except the money because that was number one on my list. I asked for two thousand more dollars a year than I would make at the job I was being offered. I pretty much knew it wouldn't be match or even negotiated, but I did begin to worry what I would say if it was.
Needless to say they didn't want to negotiate and I'm very happy that they didn't. You see at the new job, I have income that I really don't see that I never even had a chance to not see at the old job. This "income" is in term of benefits.
We have a personalized website that we log on to see all of our benefits, how much money we've made for the year, and how much our benefits cost the company. The cost of my benefits to the company is almost $14k. That comes out to about $6.50/hr in money I don't really see.
Let's compare the benefits I have now as to what I used to have:
When I turned in my two weeks notice at my old job, I was asked how much it would take to get me to stay there. I was prepared for that and about a week before I had made a list of things that would be necessary for me to stay. I didn't bring any of it up except the money because that was number one on my list. I asked for two thousand more dollars a year than I would make at the job I was being offered. I pretty much knew it wouldn't be match or even negotiated, but I did begin to worry what I would say if it was.
Needless to say they didn't want to negotiate and I'm very happy that they didn't. You see at the new job, I have income that I really don't see that I never even had a chance to not see at the old job. This "income" is in term of benefits.
We have a personalized website that we log on to see all of our benefits, how much money we've made for the year, and how much our benefits cost the company. The cost of my benefits to the company is almost $14k. That comes out to about $6.50/hr in money I don't really see.
Let's compare the benefits I have now as to what I used to have:
- Great medical insurance, costs about half as much as the old job's plan / at the old job, just about every claim got denied
- Health care spending account saves me money on my taxes and is an interest free loan / didn't even have the option
- Short and Long-term disability for no cost / had to pay for it at the old job
- Life insurance at 1x annual salary at no cost (can purchase multiple for about $1) / had to pay for such a plan
- 12 vacation days, 12 sick days, 8 holidays (and if I work a holiday, I get paid extra for it) / not quite sure but maybe 12 paid days off a year, no sick time, 5 or 6 holidays paid but not paid extra for working
- 20% off my cell phone bill with options for discounts on other things including buying a car and mortgage rate reduction/ no option for such a thing
And the BIGGEST benefit I have received in relation to this blog's theme: a 5% reduction on my credit card interest rate. This may only save me about $800 over the time it takes me to pay off my debt but it's still something.
Labels: benefits, interest rates, job
Tuesday, March 13, 2007
It's been saving my behind
With the coming of the baby and all the doctor's visits, copays and other medical expenses are racking up. Twenty dollars here, ten there can really add up. And there's nothing better than getting a bill in the mail saying your insurance company didn't cover the last $5.86.
Thank goodness that when annual benefit enrollment rolled around for 2007 I enrolled in our Health Care Spending Account. For those of you not familiar with this, it can be a bit overwhelming. I know it was when I first thought about enrolling and I'm glad I sat down and researched it a little bit.
This plan takes money out of your paycheck each pay period BEFORE taxes for you to use for your medical expenses. As you may know, medical expenses are tax deductible when you file your taxes each year, but it must be a certain percentage of your income to be tax deductible. This plan allows any money you want to put back to be tax free!! In our plan all you have to do is contribute at least $120 a year but no more than $15,000. It's a great plan and if your job has it, snatch it up. Even if you don't have a lot of medical expenses, it does pay for over the counter medicine and you can always stock up on it should you have money left over at the end of the year.
Now let me explain why this is the most awesome plan ever if you are somewhat of a hypochondriac or you always seem to end up in the hospital or in our case, have a baby on the way. I can't speak for every plan that is similar to this, but with ours you get a pre-filled debit card at the first of the year. I like to view not as a debit card but a zero-percent APR CREDIT card.
When enrolling for the plan you designate how much you would like to contribute to the acount for the year. Personally I chose $1,200 or $50 a paycheck. Now if I needed to and had an absolute medical emergency in January, I would have had a $1,200 "credit" card with me and could have paid for the medical expenses right then and there. The downside to that is that I couldn't have used it for the rest of the year. Now if this was a true credit card, I would have had to make a $1,200 purchase and then make monthly payments on it with interest added on. But since I have the money coming out of my paycheck, I am making $50 tax-free, interest-free payments twice a month.
Now a downside to this plan is that you can't change the amount you want going to the plan unless you have a change in status in your life, which is a marriage, death, divorce, birth of a child. So you do have to be wise to how much you think you may need for the year. When I first enrolled and came to the conclusion that I would need to put $1,200 away a year for medical expenses, I thought I was a little bit crazy to do that. But I also knew that if I didn't use all of it, I could send in receipts for my wife's braces and get a check back in the mail for that amount. So with us getting married in Febuary, I called back in to tell them about my change of status and upped the amount to $3,000 for the year. This is going to up my contribution from $50 a check to about $144 or $288 a month. I will probably be like where'd all my money go when I see my check with that money missing from my net income line. The great thing about this is that I've already sent in receipts for 2 braces payments and should be receiving a check in the mail soon. That check will be used to pay down some debt. And I can't wait!!
Thank goodness that when annual benefit enrollment rolled around for 2007 I enrolled in our Health Care Spending Account. For those of you not familiar with this, it can be a bit overwhelming. I know it was when I first thought about enrolling and I'm glad I sat down and researched it a little bit.
This plan takes money out of your paycheck each pay period BEFORE taxes for you to use for your medical expenses. As you may know, medical expenses are tax deductible when you file your taxes each year, but it must be a certain percentage of your income to be tax deductible. This plan allows any money you want to put back to be tax free!! In our plan all you have to do is contribute at least $120 a year but no more than $15,000. It's a great plan and if your job has it, snatch it up. Even if you don't have a lot of medical expenses, it does pay for over the counter medicine and you can always stock up on it should you have money left over at the end of the year.
Now let me explain why this is the most awesome plan ever if you are somewhat of a hypochondriac or you always seem to end up in the hospital or in our case, have a baby on the way. I can't speak for every plan that is similar to this, but with ours you get a pre-filled debit card at the first of the year. I like to view not as a debit card but a zero-percent APR CREDIT card.
When enrolling for the plan you designate how much you would like to contribute to the acount for the year. Personally I chose $1,200 or $50 a paycheck. Now if I needed to and had an absolute medical emergency in January, I would have had a $1,200 "credit" card with me and could have paid for the medical expenses right then and there. The downside to that is that I couldn't have used it for the rest of the year. Now if this was a true credit card, I would have had to make a $1,200 purchase and then make monthly payments on it with interest added on. But since I have the money coming out of my paycheck, I am making $50 tax-free, interest-free payments twice a month.
Now a downside to this plan is that you can't change the amount you want going to the plan unless you have a change in status in your life, which is a marriage, death, divorce, birth of a child. So you do have to be wise to how much you think you may need for the year. When I first enrolled and came to the conclusion that I would need to put $1,200 away a year for medical expenses, I thought I was a little bit crazy to do that. But I also knew that if I didn't use all of it, I could send in receipts for my wife's braces and get a check back in the mail for that amount. So with us getting married in Febuary, I called back in to tell them about my change of status and upped the amount to $3,000 for the year. This is going to up my contribution from $50 a check to about $144 or $288 a month. I will probably be like where'd all my money go when I see my check with that money missing from my net income line. The great thing about this is that I've already sent in receipts for 2 braces payments and should be receiving a check in the mail soon. That check will be used to pay down some debt. And I can't wait!!
Labels: benefits, debit vs credit, HCSA, health
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