I’m thrilled that Ellen DeGeneres has been picked as a new judge on American Idol’s upcoming season. Frankly, Paula reminds me of the former gluttonous economy and I’m sick of looking at her. I’ll pause here for a moment, (while you get the Kleenex out), long enough to state I like Paula’s personality, in her own overly emotional, overly done, manner.

But I’m weary of anything “over the top”.

I just want normal, down to earth and simple. The move to put Ms. DeGeneres in the judging seat, to me is a way of reclaiming those virtues. Ellen’s street smart, but not a cynic. She enjoys basic pleasures of life, (like dancing in her tennis shoes). I think she can grapple any issue, (even Simon) with intellect, not emotion.

Again, personally, this just symbolizes a move toward those down to earth virtues. What got us in fiscal trouble as a nation were in many cases those emotional purchases and the overly done lifestyles many have been living. Did we have to remodel (again)? Did we really need the payment on a gas hogging brand new SUV?  

When I think of Paula, on Idol, I feel like a child who, having unwrapped the brightly packaged gifts, is weary of the process. We’ve collectively played briefly with the elaborate, expensive toys, and now we’re moving on to simple pleasures again. My own kids have celebrated playing with cardboard boxes more than the lavish toys we’ve piled on them in the past.

In this economy Ellen is easier on the eyes. I don’t want to see “over the top” for a while. It makes me queasy, like a flashback to my checkbook register, in days before I learned to get a grip on mass purchases.

And to get us out of this fiscal mess, it’s gonna take intelligence, not emotion. All these issues we face as a nation need to be looked at armed with statistics, not opinions borne of hearsay and feelings. It takes grit to pick up the rubble and move forward, not Kleenex and crying fits. Ellen? Well, she fits the bill for what we all need, not just on Idol, but in real life- a little grit, some raw intelligence and loving the simple joys of life, once again. Save the Kleenex, we’re done crying. Now it’s time to move forward.

But, my question is, “What have we learned as individuals?”  Basically, the way I see it, we’ve got two problems going on, what the government has done to us economically, and what we’ve done to ourselves.

In this last year, many of our own budgets have been cut, due to tanking investments, job loss or benefit reduction. Permanent personal recovery will take time and effort for a lot of folks. It will also take a change in behavior on the parts of consumers.

I happen to agree with David Walker’s take on the world. In case you were sleeping in a cave these last few years, Mr. Walker was one of the original harbingers of economic doom clear back in the Bush years. I call him a prophet. As former Head of the U.S. Government Accountability Office (GAO), he predicted the very situation we’ve been facing in 2009, including the health care crisis, over spending, the near demise of the value of our dollar, etc.

When I’ve listened to David Walker, I see many correlations in the federal crisis and in our own financial situations. Nearly every issue the country has faced or is facing fiscally is similar to our personal cash crunch.

That’s why I reiterate the question, “What have we personally discovered from the economic crisis?” The adage, “Those who do not learn from history are destined to repeat it,” comes to mind.

Here’s what I think we should have learned by 2009’s brush with fiscal death:

Our personal spending habits need to change. Let me give you an example: I’ve got a friend whose husband currently nets a salary of over 65K as a professional. She’s working as a nurse full time and as a QMA part time. With a combined income of over 100K annually, they’re considering filing bankruptcy. My friend’s had no major medical issues, or giant fiscal shift, except for a freeze on commission bonuses for the last year at her husband’s work. Maybe I’m crazy, but if you can’t live on a 100K a year, in my book, you don’t deserve that kind of money. Or you need to go to a financial boot camp to be re-educated. In spite of my friends’ economic issues, they have a skiing trip planned and are forever remodeling. They’re still spending furiously,(but now on credit, without paying it off in full). Every purchase is “the last big one” and every month it continues. It’s hard watching a friend do this to herself. I’m fighting the urge to have an intervention on her behalf. This case is not isolated, by the way. According to prophet, David Walker, “Americans are living beyond their means.” It’s true. If all we learned from this last two years was to put our purchases on credit cards and take out extra loans, then we’ve learned nothing.

Americans need to proportion their spending in line with their budget. In spite of how tempting “Cash for Clunkers” or how attractive the current mortgage rates are, we still need to hang onto our money or make best use of it. Buy a used car in cash, the old fashioned way. Take advantage of the mortgage rates, but buy down from what you think you can afford, to what you know you can easily afford (including renovations, insurance, taxes and utility bills for said home). Like the government, endlessly spending (albeit even for some very altruistic programs)- if you can’t afford it, you don’t do it.

Credit and lenders are not the devil. Our own impulses are. It’s not the banks that got us in trouble. And it’s not the credit cards. It’s our misuse of them. Had we turned down banking offers to re-finance or dampened our spending, much of the fiscal damage that occurred in these 2 years would have been a tremor to the economy instead of a giant earthquake. I know many people who don’t abuse credit cards and actually make money using them, via rewards and cash back programs. My own paternal grandpa was a banker and a farmer. He’s in his late 80’s, and has a very modest home. I’m guessing at one time he could have made a shift to an upscale place, but he didn’t. I think his furniture is dated, circa 1970. Grandpa’s made good choices, curbed fiscal impulses and along the way, even had opportunity to help others.

 Place less value in stocks and more value in savings. I’m going to get dragged outside the city gates and stoned for this one. But, none-the-less, I believe it to be true. The thing is, we want our money to grow. We all desire a retirement nest egg, right? So stocks seemed like the easy way to keep spending, while still acquiring that nest egg.However, if you’ve got cash, you’ve got cash. Ain’t no one gonna take it away. Let the economy fall to its knees, and you’ll go on. The reality is, interest rates in savings accounts are barely existent.  Even the online banks, who offer “great rates” aren’t too impressive. So to save for retirement, in a traditional means, is to truly cut spending today. Your money won’t quadruple in four years, like some stocks have in the past. You’ll have to save more. But money in the bank also won’t collapse, costing your home and leaving you penniless for retirement, either. (At least there’s a federal guarantee if the bank goes belly up). I’m not saying stocks and money market funds are a totally bad idea.  I’m just commenting that we need to curtail how much value we place in a risky business, compared to good old fashioned savings. If the money fairy ever blesses me with extra cash, I’d be open to a few stocks. But I’d be sure to have savings built up first. Stock investing would be money I’d be open to lose if it came to it. (I think I’d rather invest in a good pair of Italian shoes, actually. At least those won’t lose their rich Corinthian Leather smell).  

Say “NO,” wait on purchases, be frugal as a permanent way of living. Some folks have learned this year. Their fiscally penitent at the moment, taking the pledge to never overspend again. But I wonder how this will look in four or five years? Are these same individuals going to go nuts with spending again? Let coupon shopping, buying bargains, and being frugal with fuel, utilities and expenses be a way of life, not a temporary fix. It also means saying, “No” to purchases. Or waiting on them. You’re offered a “free” upgrade on a cell phone, which actually costs you another hundred bucks? Say “no” unless your phone breaks and you’re S.O.L without it. Don’t just buy because it’s on sale, buy because you need it. And when you do have to purchase, shop for a great bargain. 

 Make your kids wait on stuff too. It’s ok that “all their friends” have something they don’t. If you’ll be strapped to purchase it, make kids wait. Trust me. I’ve got five kids who’ve waited all their lives for some luxuries. My very youngest a couple of years ago, (age 12) desperately wanted a Nintendo DS. As a parent, I’d loved to have bought one. She’s a good kid. But I couldn’t afford it. I already pay for struggling college kids’ car insurance and had just put braces on another child. My daughter took her Christmas money, from aunts and cousins, to Wal-Mart and bought a Nintendo on sale after the holidays. She’s treasured it since. She didn’t die because she waited almost two years after her friends had one. Your kids won’t die either.  

 Food for thought, while in the pre-recovery mode. I’ll leave you with David Walker’s words. In my opinion, greed, lack of fiscal accountablity, poor budgeting and spending beyond our means, are common demonimators we’ve shared with the government.  I know at one point, I’ve been guilty of all of them. But I’m trying to recover and relearn my own spending.  Let’s recover in the grassroots as well as federally.

 

 

 

 

There’s another MSN Smart Money Blog I’d like to share with you today. It was pointed out to me by a reader. I, in turn, would like to share it with you.

Jim Wang, from blog site, “Bargaineering”, guest posted on MSN’s Smart Money Blog, June 17, 2009, his inflammatory blog, “Devil’s advocate: Don’t donate money to charity.” He then proceeds to list four reasons why it’s fiscally unwise to give additional “hard earned tax dollars” to these organizations when your tax dollars are already sneaking in the back door through subsidies.

Also with all respect to Mr. Wang, is his belief that these charities do not “teach a man to fish”, but instead cause the lazy to suck money out of the system by lingering in homeless shelters and soup kitchens. He suggests one alternative is to withhold money, thus forcing the homeless to find another option, (like work). (Why do I feel like I am in a Dickens novel when I look at those words?)

Two other reasons not to donate to a charity, according to Jim Wang are high administrative costs and the ease with which people give money versus physical help. Jim states, “Money is too easy.” Rather, he asserts, charitable organizations would rather have our time and effort, in lieu of money. ( I am sure he’s polled the charities of his choice for this answer).

I have a fair amount of respect for charitable organizations, having been helped by their generosity in the not so distant past, having been a volunteer myself, a financial donor, and also for producing several charitable activist children.

Here is my Angels Answer response to the Devil’s Advocate.

Angels Answer: Why donating to a charity makes sense even in a tight economy:

Subsidies from the federal government are not enough to fund all costs. Please see the recent Johns Hopkins University study, of over 360 not for profits, released June 29, 2009. “Contributing to this stress has been a perfect storm of impacts including declining revenues (51 percent of organizations); increased costs, particularly for health benefits; declining endowments; and decreased cash flow as a result of restricted credit and government payment delays”.  The full study is attached via link below. Basically, expenses are up, donations are down, and the numbers needing assistance are skyrocketing, beyond federal budget subsidies. These organizations can make it, but they do need our assistance bridging the gap.

 Teach a man to fish? Many not for profits and charitable organizations do just that by employing those they assist. The South Bend, Indiana, Homeless Shelter is a model for this, by having a step by step model for individuals to work or educate themselves out of the program. Also, most Salvation Armies, Unemployment offices, domestic violence centers, and other not for profits do employ their clients. Give a man to fish, does not mean throwing him to the wolves while clutching his fish. It means assisting him or her over a period of time, which these organizations need money to do. If we feed the homeless in soup kitchens, but never teach them life skills, we are shorting humanity itself. And teaching job skills IS what many of these organizations are doing.

 Administrative costs are necessary. How many pastors could preach and feed their families without a salary? Would you like to run a crisis pregnancy center or a homeless shelter with no pay?  It’s my guess that these salaries are for the most part, significantly low already, without a fiscal ax being implemented by the public. These are to a degree businesses. They are in the business of helping others. As such, they do have operating costs, like it or not.

 Helping hands don’t take care of  all expenses. Mr. Wang asserts that helping is more needed by these organizations than dollars. “Money is too easy.” I attest charities need both. My local Boys and Girls Club purchases over a thousand book bags, complete with supplies at school time. By purchasing in bulk, the BGC makes the donation money stretch further. These organizations need both cash and helping hands. Frankly most organizations these days probably need mass quantities of each.

 Give how you can, folks. Whether it’s your time or your money, but realize the impact you have in generosity. There are many times I embrace the inner tightwad. Donations to charities are not included in that thought process. Sorry Mr. Wang. I’ll back you on bargaining and being thrifty, but not in this “revisitation of Scrooge” venture.

You can read the Devils Advocate by following this link:

 http://blogs.moneycentral.msn.com/smartspending/archive/2009/06/17/devil-s-advocate-don-t-donate-money-to-charity.aspx

“Perfect Storm” of Fiscal Stress Hits Nonprofits

 http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=922

Let me recap my story briefly:  A decade ago, I had a stage 3 cancer. Our business failed. The health insurance was not able to be maintained.  I got divorced shortly after my cancer went into remission, leaving me with hundreds of thousands of dollars of business debt, medical bills and five small children, zero insurance, and no job. (Read yesterday’s story or the tab here, “Who is Mrs. Bankrupt Anyway” for the ugly details). I cleaned offices at night to go to college and take care of my kids because it paid well, and I didn’t have to pay childcare. But I also was unable to get any sort of Medicaid, nor was I able to afford insurance with premiums in excess of $700.00 a month. 

In that short paragraph, I’ve just summarized countless tears, chronic depression and pain, folks.

 Try telling your kids how glad you are to be cancer free and in nearly the same breath, add,  ”We’re losing our house, children.”  It’s rather difficult to be as cheerful as you’d like. 

With 144 creditors, and in excess of 350K  (nearly all of them medical bill related), it was only a matter of time before my 70K home was attached with liens. I struggled to pay anything. I was constantly getting hauled into court for judgements. 

I’ve been told a thousand times by people, “As long as you pay $10.oo a month, no creditor can do anything to you”.  (  A giant LOL to that!)

Wrong. Wake up and smell the health care coffee, people. 

 Since most hospitals are not privately owned, they are not  likely to cut you a deal.

 Generally hospitals require you to pay off balances in full within a year, or the account is turned over to collections. Collections in turn adds a fee, charges interest, and typically files judgements and requires you to appear in court every few months, even if you can’t pay anything at all. I am convinced if they saved all that attorney money, it would cut all our medical bills in half.

It’s rather humilating to stand before the judge, month after month, and relate that you are working, but too poor too pay anything more because you had too many creditors to divide up your income by.

At even $10 per creditor a month, given the number of creditors, I was looking at  payments of $1,440.00 to medical bills alone, plus other expenses related to raising five kids, housing, etc. (And incidentally that was more than I was earning a few months).

What’s it like to be uninsured for a decade and have chronic health issues? Can a doctor refuse to treat you? Aren’t there places to obtain medical care?

Being uninsured for a healthy person is, I am sure, difficult. Being uninsured for a person who needs 10K a year in scans, blood work, thyroid medicine, and has a low immune system is beyond difficult.

Those who have health insurance, if they need medication simply see the doctor, obtain script, fill script. 

• Average cost, to see physician, with insurance- $30.00
• Average cost medication with insurance, $20.00

Those without health insurance, here’s what it looks like:

Step one: Find a doctor who will treat you with no insurance. Call 15 offices. If you owe any of the hospitals attached to the doctors office, you must pay a payment to the hospital and pay physician in full. (If they will see you).

• Average cost of primary care physician w/o insurance- $ 125.00 Specialist average cost- $200 and up.
• Average minimum cost of payment to hospital before seeing physician- $50.00- $100.00
• Average cost of prescription w/0 insurance- $20-50.00 or higher

This of course, is IF a doctor will see you without insurance. Suddenly, doctors advertising  for new patients in newspapers are, “no longer taking patients” when I’ve called.  That happened to me three times.  

Another time, an oncologist who saw me only after being begged by a friend, gave me a whole five minutes of his time. He told me to go home and wait with a lump on my neck for six months and then he would, “See if we needed tests.”

If you look at the American Cancer Societies guidelines, (especially for a two time cancer patient), they suggest any suspicious lump be biopsied after a few weeks. 

And several physicians ask that you “pre-pay” before they even see you, and with cash. (As if they assume low-life humans with medical bills also must bounce checks, too).

Try tossing in eye exams, contacts or glasses. (Add a few extra hundred bucks a year).

Heaven help you if you need to visit, (gasp), a DENTIST. There you can hope to get away with $500.00 by the time they do x-rays, cleaning, visit.  If you need more than that, odd’s are you can’t afford it. Break a tooth? Have a cavity? Better pray you win the lottery, cause you will add at least several hundred dollars, if not thousands.

I’ve been to the dentist twice in ten years. And I wear 30 day contacts for four – six months these days to delay out the costs. I take left over anti-biotics from friends, or ones that my kids are allergic to. Once I took anti-biotics a vet gave my dog. I am serious.

This lack of health care and debt becomes a self propogating cycle, too.

I have had to resort to going to the ER, (which only incurred yet more costs) but could not afford the cash out of my pocket, when I had pnemonia to see a primary care physician. That particular visit, I needed an X-ray, anti-biotics, and an exam. I had a 103 temp and couldn’t breathe. The only physician who could have seen me, would have charged $125.00 for a visit and an extra $125.00 for a chest x-ray.  Anti-biotics would have added an extra $75.00.

Some how I didn’t remember to have an extra $325.00 laying around when I got ill that day with pnemonia.

Lately, I am really thrilled to have found a doctor who thumbs his nose at conventional health care pricing and actually sees me at a much reduced price. I am thinking of calling the Catholic church to have him cannonized. If there is anyone we should contemplate cloning it might be him. But it took me seven years to find this doc. And it doesn’t solve the issue of tests, scans, medication or anything really exciting like mammograms. I’d kiss the ground of a dentist who’d see me for cheap too.

Tomorrow, I’d like to talk about what happens from this point to credit, after the fall of medicial bills has hit and you are deep in the winter of debt. I’d like to to give you the side of  what not having health care has cost this mom of five, and what it costs society. There’s another side to this picture of health care. That will be my final part of the Health Care saga. You’ll either be thrilled or enlightened or enraged, I am sure, when I’m done.

This week, I’d like to take you on a walk in the shoes of those who have no health care. I am one of those huddled masses. I grow weary of hearing Washington give their advice on a topic few of them have experienced. Walk in my shoes for a decade without health care and you can offer an informed opinion.

In light of recent health care reform legislation, I thought I’d give my side of this, or rather that of the estimated 46 million Americans who do not have insurance. I am not a politician. Likewise, I’m not sure America needs my humble opinion how to fix the problem. 

But there is a health care crisis.  And a very real problem exists. I am pretty sure we all agree on some varient of that.

This site, by virtue of its name, is a budgeting spot. Medical bills play an important part in debt management. If you are blessed to have health insurance, this may give you a bit of insight into a topic congress and CNN are force feeding the public.

How did I become uninsured?

About a decade ago, our family business went under. I was in the process of chemo and radiation. When the company died a slow and painful death, it took with it my insurance coverage. (For a better synapse, read the tab here, “Who is Mrs. Bankrupt?”).

Post divorce, based on my child support of $1000.00 a month, and the work I picked up cleaning offices while I went to college, I made too much for Medicaid, and too little for being able to afford insurance. Nearly all the unenlightened told me about the “can’t turn you down” program my state offered. Based on two kinds of cancer, two life threatening blood clots, and a latent heart problem, my “Can’t-Turn-You-Down” premium was $774.00 a month AND covered NO preventative care (like the very scans I needed to track any reoccurrences).

No folks, the insurance company didn’t turn me down, they just made it so that no one but Donald Trump could afford the premium. 

By the way, Medicaid’s income threshold today for a family of two is that you must not exceed $19,378.00.  At that time, and always through this decade, I have been above their guidelines. You’d about have to be just to put a roof over your head and those of your family.

 In other not so nice words, “You’re screwed if you work and want Medicaid.” 

And, if you have any medical history at all, it’s likely you can’t afford the premiums from insurance. 

See the lovely paragraph below, copied straight from Medicaid’s website-

“There are many people who are poor, with incomes below the poverty level, who do not meet Medicaid requirements because they do not fit within the designated eligibility groups.  

  Based on 2009 Federal Poverty Guidelines, a family of two would need an income less than $19, 378 to qualify for Medicaid assistance”. DID YOU CATCH THAT? “THERE ARE MANY POOR PEOPLE WHO DON’T QUALIFY?”

 We have a crisis born of inflated medications, overpriced services and doctors who have been forced to sell their souls in order to practice. 

 

Why didn’t I just get a normal job that offered insurance?

There were numerous reasons. With five small kids still at home, childcare would have eaten up my wages. (At a ten dollar an hour job, I would have netted roughly $360.00. Childcare for five kids in community was around 200.00 plus dollars a week, back then. I was reasonably certain we could not live on $160.00 a week and child support).

Without a degree, and having my only work experience being with a now defunct company, my income prospects were poor.  I started my own office and new construction cleaning service because it allowed me to be with the children much of the time and work flexible hours so I could attend college. Cleaning paid better than any other job I could find at that time. A lot better. 

I was no slug, feeding off the system, folks.

But damn, did I feel it when I had to go to the doctor.  

 Tomorrow and throughout this week, I’d like to talk about what it’s like to not be able to get medical treatment, what it cost me in the way of finances & why I lost a house  over medical bills.

 I want to hear from you this week if you have input on health care. (or lack of it).

I admit it, I am a CSI junkie.

Actually, our whole home is a veritable crime scene waiting to happen, given the laundry piles stained with various “trace” items and mountains of suspicious toxin laden dishes that stack up. There probably is a fugitive or two hiding here amidst the hair balls and clutter. I am addicted to the show, not housework, sad to say.  

So it should come as no surprise I find life lessons in these epic life events, such as 12 hour marathons of CSI.  Recently, I discovered there were credit tips to be gleaned from CSI.  (If I were doing housework, I would have missed this life altering data).

1. The Evidence Doesn’t Lie. Your credit score, alas, is evidence that no matter your alibi, will either “convict you” to a poor interest rate, inability to obtain loans, or exonerate you to fiscal freedom.  It’s a scary thought, (like being interrogated under a stark light bulb). But take time to know your credit score, and keep regular tabs on it.
2.  Clean Up Trace Evidence.  Even a small fiber of bad fiscal decision left behind should be cleaned up. In other words, after running a credit report, have old evidence of bad credit removed. If you filed for bankruptcy, it’s likely there are several items that need to be cleaned up.  In my case, I still have residual items that pop up on various credit bureaus from a 2005 bankruptcy!  Four years of debt DNA still visible at times. Ugh! Write letters and make calls to remove evidence.
3. Solutions Take a Team- Overwhelmed by debt and credit issues?  Get help if you need it in the way of credit counseling, debt relief or debt settlements if you are feeling it’s too big a crime scene.  I have used, in the past, an attorney’s advice, budgeting tips from Consumer Credit Counseling, and thrown myself on the mercy of creditors to work plans out. It often takes a team approach to solve a debt crime against your credit.  Call in the experts.
4. Use Science to Solve the Homicide- This is my theory, finance is a science. Like all science it can be predicted rather measurably, and recreated in similar conditions. My own credit issues were very complex, but not unusual.  I did stupid things and committed desperate acts. Now I have to be vigilant so I don’t recreate the same ugly credit murder again. I am convicted of massive debt crimes, but am trying to rehabilitate myself.  I killed a 720 credit rating in cold blood, I admit it. Clothing purchases once upon a time racked into the thousands, offing my credit score when I couldn’t pay the card’s interest. But like all science that is predictable and measurable, getting good credit is also a science. I now try to pattern myself after those who have good credit and amend my crimes. Study those who got their butts in credit Sing Sing, and learn what they did to get parole.
5. The Good Guys Win- I have those days where debt appears to be eluding me like a slippery villain.  It seems to take forever, working the cold case of my dead credit. But in the end, I believe in truth, liberty and the American way- and I trust I can win, if I do the right thing. If you are suffering under weight of poor credit, keep working the case, my friends.

Eight p.m.- time for more knowledge via Horatio.  Maybe CSI can teach me tips on raising teenagers tonight and that would be true enlightenment.

By the way, if you take the time to watch the endless sea of “one liners” above, you will notice a choice bit of Horatio Cain, stated, “You don’t spend a thousand dollars on clothes you are never going to wear.”

Ummm,  make that, ” I don’t spend a thousand dollars on clothes I am never going to wear, again, in this lifetime.” 

I’m reformed.