Monday, November 27, 2017

The Power of Cash in a Frugal Life

Whether it is Icelandic Kronor or American Dollar Bills, cash is a powerful tool in the life lived on a frugal path.  Cash keeps you honest.  Cash keeps you on your toes.  Cash evokes a feeling when you hand it over more so then swiping a credit card or punching in numbers on a debit card.

On recent travels to Kentucky and then Iceland we paid in cash for our discretionary items.  And in both cases we came home with a surplus.  A voice in my head tells me we'd have gone over budget, just a tad, if we had paid with credit cards.  Now we pay those credit card balances in full each month, but spending at or under budget is key in our frugal life.  So we've lifted the travel with cash and applied it to everyday life.  Each week I head the bank.  I deposit payments received into my business checking, and from our joint checking I take out what I'll need for the week ahead: groceries (that's the big one); fun activities, and other miscellaneous items. For the first month in I cannot remember, we've spent less on groceries than we budgeted.  I credit that to knowing we have $x, do we want to spend it on take-out or just make a meal at home, and only putting items in the cart that will be eaten in the week ahead.

Cash -- it's a powerful tool. Anyone else with me on this aspect of a frugal life?

Thursday, November 9, 2017

Life at 60 Degrees

It used to be 62 degrees, Fahrenheit where our thermostat rested.  Over the years it was our comfort zone, but near freezing for the unaccustomed visitor.  With our push to fill the hole in our budget caused by drastic increases in our health insurance premiums our new norm has become 60 degrees.  At times we nudge the thermostat higher to 62, and will make sure we keep it high enough to prevent frost from forming inside -- two spots are most prone, the corner of our son's bedroom and the seat of our oversized bay window in the living room.

Life at 60 degrees, made possible by:

  • space heaters in the bathrooms -- an efficient way to heat up a room in the morning or after an evening shower.  We can be comfortable without heating the entire home;
  • slipper socks -- when your feet are cold everything is cold;
  • letting the sunshine in as much as possible -- enjoy the free warmth of mother nature;
  • long underwear make great PJ's and are not reserved for sledding or outdoor play;
  • sipping hot tea;
  • put on a sweater.....and a scarf doesn't hurt either.
Pushing new limits to save costs.  It will help our budget and ease our strain on the Earth.  Not sure if it will help or harm our health (just kidding, all that tea is a good thing, right?)

Sunday, November 5, 2017

That's A Big Hole: Paying for 2018 ACA Health Insurance Premiums

On a icy night in March 2005 my husband and I met, and chief among our common interests were a fondness for coupons and all things frugal (not cheap, but an efficient use of time and money).  Twelve years later we both own our own businesses (me a legal practice, him an electronics engineering design firm), where frugal living goes a long way in allowing us to follow the path of ownership and not navigating the forest of employment.

With the decision to both employ others and not be an employee comes the purchase of health insurance independently.  That, as you may guess, is down through The Exchange.  This year we have a policy through Dean SSM, where we pay $700/month as a premium, but have a $13,000 annual deductible (we pay the first $13K before insurance co-pays kick-in).  In reality it means we need to earn $1,000 a month, pay our income taxes, and then have $700 left to pay the premium.  We opted for Dean SSM because they were cheap.  And the quality of care was not great.  In fact we started going to our old providers, paying out of network fees.

With 2018 we are going to go with a plan that works with our preferred providers (Associated Physicians and the UW System).  But we will pay a price.  Our premium is increasing to $1,275/month with a $13,000 annual deductible (for reference, the 2017 plan would be $1,005/month).  We earn too much for a subsidy, so it is up to us to fund the entire bill. That is a pretty big hole to fill.  Since there is no money tree in our backyard, we have to fund the gap through increased revenue and decreased spending.

As we move into 2018 follow along as we take a pretty frugal life even deeper.  When we look at the numbers there really is very little room to cut towards the $500+ gap.  That means we need to earn more, something we can do since we both work for ourselves.  Our kids assumed this meant we were simply going to work longer hours.  Yes, in part, but it really means we need to work smarter.  Where can we increase profits by cutting expenses?  

We are grateful to be able to afford this increase, many cannot.  We are also grateful that pre-existing conditions do not deny one coverage.  But this is a hard pill to swallow for a family focused on living frugally where we can follow our passions and save for college, retirement, and the health care costs that will come with old age.  In 2018 we'll pay just over $28,000 in health care before insurance assistance would kick in.  

Taken in Iceland this past August, Kerid is an ominous crater lake, but is surrounded by empowering color and power.  This lake will be my meditation as we march into 2018 and answer the call to pay more for health insurance.