Saturday, June 3, 2017

Inspiration from Alice Walker, Henry David Thoreau, Arnold Schwarzenegger, and More

Once a month (or so), I share a dozen things that have inspired me to greater personal, professional, and financial success in my life. I hope they bring similar success to your life.

1. Alice Walker on power

“The most common way people give up their power is by thinking they don’t have any.” – Alice Walker

You are not powerless. You are never powerless.

You control what you think. You control what you feel. You control how you speak to others. You control whether you try to use your words to lift up others or to drag them down. You control whether you spend your energy stepping into a challenge or stepping away from it. You control whether you choose to stand up against something that’s wrong or stand idly by while it happens. You control whether you tell others about your stand against something wrong or whether you say nothing. You control how you spend your money, your energy, your time, and your social capital.

All of those are completely controlled by you, no one else. Those things all have great power within them, the power to change lives, the power to change your life, for starters. All you have to do is decide to use those powers for something worthwhile instead of letting them idle away. When you let them idle, you give up your power by your own choice.

What, other than your own choice, stops you from writing a letter to the editor? Calling your congressperson? Telling a friend about something you care about? What, other than your own choice, stops you from spending time stocking shelves at your local food pantry? What, other than your own choice, stops you from telling someone that you love them and how important they are to you? All of those options are powerful options, yet it is only you that chooses whether or not to execute those options.

It’s your choice, no one else’s.

2. Crash Course Philosophy

Crash Course Philosophy is a series (currently numbering 46 videos) that provides a highly entertaining and wonderful broad introduction to philosophy. More and more, I’ve come to realize that personal finance is a mix of philosophy, psychology, and economics, with some bits of sociology thrown in there as well, all baked up together into something quite fascinating.

For me, the value of philosophy is that it’s taught me a lot about how I think, what elements of my life that I have control over (and what I don’t have control over), and what broad approaches I should take to my life going forward. To me, all of that is really foundational stuff for personal finance success. Asserting more control over my day-to-day decisions has been absolutely key for any and all success I’ve found, and I attribute a lot of that to reading philosophy, especially the Stoics (people like Marcus Aurelius and Seneca, who I often quote here).

This series is a great lively introduction to lots of different ideas and schools of thought in philosophy. It’s kind of what I might hope that a great Philosophy 101 course at a university might be like. I hope you’ll give it a shot – it’s stuff like this that makes me believe that Youtube can someday replace cable television entirely.

3. Chuck Palahniuk on a happiness scar

“It’s so hard to forget pain, but it’s even harder to remember sweetness. We have no scar to show for happiness. We learn so little from peace.” ― Chuck Palahniuk

We all have joyful memories, but it is often the painful events that really etch themselves on our souls. Those scars lead us not to trust, not to open up. They encourage us to be selfish and to believe the worst in others.

Try instead to focus on what exactly brought you joy. Joy comes from opening up to others. Joy comes from sharing moments. Joy comes from trust. Joy comes from letting down your guard and experiencing the moment.

Our lives would all be so much better if we could live by the beautiful marks of our most joyous moments instead of being guided by the scars of our lowest moments.

4. Bullet journaling

Bullet journaling is simply a method of tracking your thoughts and activities in an interesting way that enables you to mix together thoughts and notes you’d like to save with the ongoing tasks of your life.

For me, bullet journaling is more of a source of inspiration for how to keep track of my own events. I tend to journal more as a reflection on my days and rely more on digital tools to keep track of my tasks and appointments.

More than anything, though, I love the bullet journaling community for how they share their ideas. I’m almost constantly sneaking ideas and strategies out of there to help me improve my own personal reflections and ways to track habits and so forth.

5. Brigham Young on taking offense

“He who takes offense when no offense is intended is a fool, and he who takes offense when offense is intended is a greater fool.” ― Brigham Young

Here’s the core message behind that quote: stop worrying about what other people think of you. There are people who aren’t going to like you, no matter what you do. If you spend your time worrying about how to please those people, you won’t ever achieve your goal, plus you’ll never achieve other goals in life, either.

Instead, worry about yourself. Worry about what you’re going to do to achieve the things you want to achieve in life. If you don’t know what it is that you want, spend some time figuring that out. Try to improve yourself in some significant way every single day.

If you have people in your life that you can’t please, don’t worry about pleasing them. Worry about making yourself proud of who you are. If you can strive for that, you’re going to have a pretty good life.

6. Alex Hofeldt on how small we are in the scale of the universe

From the description:

In 1995, scientists pointed the Hubble Telescope at an area of the sky near the Big Dipper. The location was apparently empty, and the whole endeavor was risky – what, if anything, was going to show up? But what came back was nothing short of spectacular: an image of over 1,500 galaxies glimmering in a tiny sliver of the universe. Alex Hofeldt helps us understand the scale of this image.

Whenever I feel broken down or ashamed of some mistake that I’ve made, I look up at the night sky and I realize that whatever mistake I’ve made is so tiny in the scale of the universe that it really doesn’t matter too much. At worst, I’ve adversely affected my own life and maybe the lives of a few people around me. It’s so tiny in the scale of things. I can’t and won’t let that little mistake drag me down. I’ll recover from it. I’ll hopefully fix it. The mistake is but a small one, even if it seems enormous.

The universe is far larger than I can really comprehend or that anyone can really comprehend. Everything we see in the entire night sky is just a drop of water in the ocean compared to the stars and galaxies that exist in the universe. It’s incomprehensibly vast.

It can be easy to feel like a meaningless speck in that vastness, but I find it comforting. It lets me know that the things that I feel are so big in my life really aren’t that big at all. They’re incredibly small, really. It makes the mountains in my life seem easy to reach and to climb.

7. Effective Altruism

Effective altruism is a topic that has deeply inspired me over the past few months to really think about what I’m doing both professionally and personally to do the most good I can do in the most people’s lives.

From this website:

Effective altruism is about answering one simple question: how can we use our resources to help others the most?

Rather than just doing what feels right, we use evidence and careful analysis to find the very best causes to work on.

But it’s no use answering the question unless you act on it. Effective altruism is about following through. It’s about being generous with your time and your money to do the most good you can.

Right now, I’m going through a great deal of reflection about the ideas on that site, about not only where my time and money goes, but about the “good” that I am doing with my writing on The Simple Dollar and elsewhere. It’s not an easy thing to really evaluate and compare to other things, but that doesn’t mean it’s not a question worth answering. Trying to figure out how to be more effectively altruistic in my life – and seeing how others have done so – is something that’s really inspiring to me.

Peter Singer gave an amazing short talk on the topic of effective altruism a few years ago:

From the description of that video:

If you’re lucky enough to live without want, it’s a natural impulse to help others in need. But, asks philosopher Peter Singer, what’s the most effective way to give charitably? He talks through some surprising thought experiments to help you balance emotion and practicality — and make the biggest impact with whatever you can share.

Wonderful, wonderful stuff.

8. Henry David Thoreau on why we’re busy

“It’s not enough to be busy, so are the ants. The question is: What are we busy about?” – Henry David Thoreau

This is a quote that I’ve found myself writing on top of my to-do list each morning. It’s an effort to try to reflect on why I’m doing the things that I do each day.

Why am I writing articles? To make an income, of course, but also to help people on their financial and life journeys and maybe inspire them or make them smile.

Why am I doing household chores? To keep the house clean and welcoming to guests and to make sure I can find things when I need them.

I’m trying to ask those things of everything that I do. In other words, I’m trying to give all of my tasks a meaningful purpose so that when I’m doing them, I can think about why I’m doing them and how it’s really benefiting my life, even if the task seems dull.

I’ve found that this is not only really helping to motivate me with regard to things that I need to get done, but it’s also putting some “soul” – for lack of a better word – into a lot of tasks. There’s this extra layer of meaning there that wasn’t there before, and it feels as though it’s drawing out a better part of me and encouraging me to invest more of myself into the work.

If that’s not inspiration, I don’t know what is.

9. Brothers Green Eats

A few weeks ago, I was looking for a video on making kombucha. Kombucha, for those unfamiliar, is a naturally fermented and carbonated drink that you can make in your own kitchen. I’ve made many batches of it and I wanted to find a video that really summarized the whole process, both including why one would want to make this stuff and the basics of how to make it.

I came across this video

… and it was just about perfect. It also made me fall in love with the channel as a whole.

Brothers Green Eats is an absolutely charming Youtube channel focusing on cooking at home. They cover a huge variety of topics and recipes and techniques and it’s all done in a very entertaining way. I’ve found myself binge-watching these videos, even at times when I should be doing other things.

That video and one of its sequels drastically improved my homemade kombucha, too.

10. Orson Scott Card on desire

“Once you know what people really want, you can’t hate them anymore. You can fear them, but you can’t hate them, because you can always find the same desires in your own heart.” – Orson Scott Card

Almost everyone I’ve ever met wants the same things that I want. They want to have a life that’s more than just work and sleep. They want to have a family of some kind, whether that family includes a spouse and/or children or just a very close tight-knit group of friends. They want to be loved.

When you learn about a person or meet a person, think about their life through that context. That person wants to have a rich life. That person wants to have close human contact. That person wants to be loved. That person wants to be respected. It may be that they don’t know how to do those things or that they struggle with the execution, but the vast, vast majority of people just want those things in life.

It becomes a lot harder to hate someone when you realize that you have those fundamental things in common.

11. Sharon Jones and the Dap Kings – 100 Days, 100 Nights

From the description:

“100 Days, 100 Nights” by Sharon Jones and the Dap-Kings, the title song from the album, available in stores offline and online. The video was directed by Adam Elias Buncher using two vintage TV cameras bought on E-Bay for $50 each. Shows how much you can do with just a little soul!

Sharon Jones’ voice sounds breathtakingly alive to me, as if there is a powerful and energetic spirit inside of her that must get out and the route that it has found to escape is through her voice.

I think, of all of her songs, “100 Days, 100 Nights” shows off her soulful voice and musical style better than any other. I could listen to this over and over and over. And, in fact, I did while writing this article.

Sharon Jones passed away in November 2016, and when she did, the world lost an amazing voice and talent.

12. Arnold Schwarzenegger on struggles and strength

“Strength does not come from winning. Your struggles develop your strengths.” – Arnold Schwarzenegger

You don’t build muscle by lifting a light weight into the air 100 times without pausing. You build muscle by lifting a weight you can barely lift several times until that last lift is really a struggle. Then, ideally, the next time you lift it, it’s just a tiny bit easier than before, and you keep repeating it until the next time you decide to add a little weight to the lift.

Why? Strength is only built through challenge. If you’re not facing challenge, you’re not building strength. If you’re not pushing your body or your mind toward some kind of limit, then you’re not improving. If it’s not hard, it’s not making you better.

Push yourself to read something challenging and you can feel your mind twisting under the new ideas. Push yourself to exercise until you’re panting. Push yourself to lift until your body is struggling.

You’ll find that it’s the struggle that makes you better. The easy stuff doesn’t really do anything at all.

The post Inspiration from Alice Walker, Henry David Thoreau, Arnold Schwarzenegger, and More appeared first on The Simple Dollar.

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Friday, June 2, 2017

How to Afford Quality Dental Care

You have a dental problem that needs attention, but you’re not sure how to pay for your trip to the dentist. Take a deep breath – it’s okay. There are several ways you can afford quality dental care without putting yourself in a financial tailspin.

This guide will help you understand the options you’ll have when budgeting for a dental procedure. We’ll cover expected costs for common procedures. We’ll look at what to do if you don’t have insurance. And we’ll go over the basics of dental financing, dental credit cards, HSAs/FSAs, dental savings plans and dental insurance.

Because every situation is different, we recommend working closely with your dentist and insurance provider (if applicable) to make a plan that fits your needs and budget. But a general understanding of what’s out there will help you ask the right questions.

Let’s get started.


The Cost of Common Dental Procedures
Dental Credit Cards vs. Dental Financing
FSAs and HSAs
Dental Savings Plans
Dental Insurance
What About Cosmetic Dentistry?
Other Budgeting Tips

The cost of common dental procedures

To start, here’s a look at the typical costs you can expect for common types of dental work.

Estimated procedure costs collected on health.costhelper.com.

If you need a dental procedure but you’re not sure how you can afford it, start by talking to someone at your dental clinic. (Do you still need to choose a dental clinic? You can find one through your dental insurer’s website or your state’s dental society.) Dental clinics have experience making treatment practical for patients on a limited budget. If you do have insurance, your dentist’s front-desk staff can give you an idea of what you’ll be responsible for paying out-of-pocket.

How do I pay for a dental procedure without insurance?

If you don’t have insurance, someone at your dental clinic can help you estimate costs of treatment and describe financing options. Consider dental financing or a dental savings plan to help pay for a major procedure.

Dental credit cards vs. dental financing

Dentists know that patients are more likely to get the treatment they need if they can spread out payment over months or even years. Most dental clinics partner with third-party creditors who simplify the process for the clinic; some clinics even offer in-house financing. Most payment plans, however, go through a third party and have some kind of interest baked into their contracts.

Most of these arrangements are unsecured loans, although there are dental credit cards that serve a similar purpose. Your clinic may work with more than one financing partner – and they may agree to work with another financing company of your choosing. Don’t be afraid to do a little shopping to find a payment plan that works for you.

Pitfalls of dental credit cards and dental financing

There are a couple of common characteristics between dental credit cards and dental payment plans. The first common feature is an interest-free period, which may be 6, 12 or 24 months. The other similarity is a high interest rate that kicks in if you don’t pay off your entire balance by the end of the intro period. Once the introductory period has passed, what once was an interest-free loan can be subject to back-interest at rates as high as 27%, as was the case with CareCredit.

Before you lock into a payment plan, be sure you can make your payments every month without depleting your emergency savings. It’s also important to fully understand the terms of your financing before you sign. Clinic staff shouldn’t make you feel rushed. Ask questions and take your time to research your options before committing.

FSAs and HSAs

If you don’t have dental insurance but you do have health insurance through your work, an FSA (flexible spending account) might be an option. You can use your FSA contributions to pay for eligible treatments with a tax advantage. (FSA contributions are pre-tax, meaning they reduce your taxable income.) The max you can contribute to an FSA in 2017 is $2,600. The caveats are: unused FSA contributions don’t roll over to the next calendar year, and you can only adjust your contribution amount during special open enrollment periods.

If you have an HSA (health savings account) or if your employer’s health coverage offers an HSA option, you could also pay for your dental work with tax-advantaged income. (HSA contributions are also pre-tax.) HSA contributions do roll over to the next year – though they’re only available to people who have a qualifying high-deductible health plan (HDHP). Max HSA contributions for 2017 are $3,400 for an individual and $6,750 for a family.

For more on HSAs and FSAs, read up on Health Savings Accounts vs Flexible Savings Accounts.

Dental savings plans

The term “dental savings plan” may be misleading. Sometimes called “reduced-fee dental plans” or “discount dental plans,” these programs are really loyalty networks. Patients with dental savings plans pay for care out-of-pocket but at a discounted rate. Dental care providers lose some of their profit margin in exchange for securing more patients. Dental savings plans are not insurance, nor are they savings accounts; they are paid memberships to networks of dentists who’ve agreed to discount their fees for members.

Benefits of dental savings plans

Dental savings plans, unlike individual insurance, allow you to take advantage of their discounts immediately. Some plans may also cover cosmetic procedures not deemed medically necessary by insurance, such as braces or veneers.

Risks of dental savings plans

Dental savings plans have fee schedules with specific costs for each procedure. Your treatment must be on the schedule, or you’ll be responsible for your clinic’s normal rate. Be sure that you understand if you’re agreeing to any treatment options or upgrades beyond those listed in your plan’s fee schedule.

Not all dental clinics participate in dental savings programs. You’ll want to make sure the plan you’re shopping for includes your home dentist (if you have one) or a dentist that you feel comfortable with.

Dental insurance overview

Dental insurance is different than other types of insurance. It rarely covers 100% of major dental procedures. In addition, most dental plans have a relatively low maximum yearly benefit. Depending on your plan, your coverage may max out after your insurer pays for $1000 or $1500 of your dental care in a year. Dental insurance is similar to other insurance in that you will likely have to meet an out-of-pocket deductible before your coverage kicks in. That could be something like $50 or as much as hundreds of dollars depending on your plan’s coverage.

Drawbacks aside, dental insurance doesn’t have to be expensive. Many decent plans cost less than $20 a month. Those with dental insurance can find further help in paying for the remaining cost of treatment by using some of the other means covered in this article.

Types of dental insurance

The first and most basic classification for dental insurance is whether it’s through an employer or is an individual policy. Most people with dental insurance are covered through their employer (also called a group policy), either as a default condition of their job or by opting into the plan.

Individual coverage vs. employer-provided coverage

If you have an immediate need for a procedure but don’t already have dental insurance, then an individual policy might not be the best option. Most individual dental insurance policies have waiting periods for different procedures. For example, you may have to wait 6 months from sign-up to be covered for a routine cleaning. Major procedures like root canals or crowns could have waiting periods of a year and a half or more.

If you enroll during open enrollment, individual dental insurance is available as part of some health insurance plans or as stand-alone insurance through the Health Insurance Marketplace. Marketplace open enrollment for 2018 runs from November 1, 2017 to December 15, 2017.

On the other hand, employer-provided coverage is available for dental work, often without the same waiting periods. You may, however, have to wait the length of your employer’s probationary period before you can use dental coverage if you just started your job. If you don’t have dental coverage, but it is available through your employer, check with your human resources manager about signing up.

Closed vs. open network

The second classification for dental insurance has to do with the way the plan pays benefits to your dental clinic. Most plans use the PPO (Preferred Provider Organization) model, though some plans use the indemnity model. We’ll touch on some of the other models as well, but the most important thing to know is whether a plan uses a closed network or an open network.

PPO plans

PPO plans use a closed network of dental care providers. (Plans that use a closed network are also called “managed care” insurance). This model offers better rates for preferred providers – that means lower out-of-pocket costs when you stay within the network. PPOs also cover out-of-network providers (just at less favorable rates for the patient).

PPO plans typically have three tiers of coverage rates, and many use a 100-80-50 structure. Preventive maintenance procedures make up the top tier and are covered at 100% of the cost. Basic restorative procedures, like fillings, are the next tier. They’re typically covered at 80%. The bottom tier includes major restorative procedures like crowns, root canals, dental implants and other surgeries. Even though these are the most expensive procedures, they’ll often qualify for the lowest rates of coverage—around 50% of the total cost. Check your plan’s schedule of benefits to find specific percentages for each tier and the procedures covered under them.

Other, less-common plan types that use closed networks are HMOs and EPOs. Neither HMOs nor EPOs cover treatment by out-of-network providers.

Indemnity plans

Indemnity plans use open networks. They are the oldest style of insurance. With indemnity coverage, you can go to any dental care provider, and the plan will pay for a percentage of the total cost.

Indemnity plans, like PPOs, usually have a tiered schedule of benefits that covers minor treatments at more favorable rates than major ones. Check the schedule of benefits for your particular plan to know what’s covered at which rates.


You should talk with your dental clinic and insurance company to get pre-authorization before scheduling a dental procedure. This process can take a few weeks, but it can be helpful to have an idea of what your financial responsibility will be beforehand. Pre-authorization is routine for dental clinics and a required service for insurance companies.

What about cosmetic dentistry?

A nice smile goes a long way. If you want to make yours look a little nicer, there are a few ways you can make your cosmetic dentistry more affordable.

What is cosmetic dentistry?

Cosmetic dentistry is dental work done solely to improve appearance. Examples of cosmetic dentistry include veneers, dental contouring and reshaping, whitening, some types of braces, all-porcelain crowns, bonding (filling or attaching artificial material to the surface of teeth) and extruding (lengthening) of teeth. Cosmetic procedures are those not considered medically necessary and are usually not covered by insurance.

Note: some types of dental work improve both the health and appearance of your teeth. Such treatments are usually at least partially covered by dental insurance.

How can I afford cosmetic dentistry?

Although dental insurance usually won’t cover cosmetic procedures, you may be able to find discounts through a dental savings plan. You can also ease the cost burden by spacing out procedures or by distributing your payments with dental financing. Better yet, consider starting a personal savings plan to save up the money needed for a cosmetic procedure.

Other budgeting tips

Pay lump-sum

If you have the cash on hand, consider paying for your procedure in one lump sum to avoid the extra cost of interest from a loan or credit card.

Save up for emergencies

It’s not a bad idea to have a savings account just for dental, medical and car emergencies. A good way to start saving is to set up an automatic transfer to move money from your checking account to savings account each month. Building up an emergency fund before you need it can take some of the stress out of surprise dental issues in the future.

Prioritize your treatments

Take care of the most pressing problems immediately to prevent future expense. Then you can space out less time-sensitive procedures to ease the impact on your finances. Ask your dentist for help developing a long-term, prioritized treatment plan.

Don’t wait to take care of your teeth

As the saying goes, “an ounce of prevention is worth a pound of cure.” Preventive maintenance is cheaper, better-covered and less painful than a major restorative procedure. Consider the following strategies to keep your teeth healthy – and avoid costly procedures in the future:

  • Visit your dentist twice a year for exams and cleanings, and be sure to take care of cavities quickly.
  • Seek treatment for missing teeth to avoid jawbone loss.
  • Ask your dentist about a fitted mouth guard if you grind your teeth at night, as grinding can cause cracked molars that will later require crowns or implants.
  • Avoid chewing ice.
  • Brush your twice daily and floss once daily.

Good daily habits go a long way toward reducing costly dental issues in the future. By prioritizing dental health and knowing your options for financing issues that do arise, you can keep your teeth and your budget in good condition. Now that’s something to smile about!

The post How to Afford Quality Dental Care appeared first on The Simple Dollar.

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How to Afford Corrective Eye Surgery

Thinking of ditching your glasses and contacts in favor of laser eye surgery? As technology advances, it’s becoming safer, more effective and more available than ever. Nevertheless, in many cases, the procedure still entails a significant cost, which may discourage people who would benefit from seeking treatment.

Better eyesight is a worthwhile investment. It’s a life-changing procedure for the cost of an old used car. However, not everyone’s bank account is prepared for purchasing either one. But don’t dismiss the possibility yet: there are savings options available to help lower procedure costs and lessen their impact on your day-to-day budget. Stay with us to learn more about laser eye surgery costs, coverage, and payment options that can make the care you need more affordable.

The cost of laser eye surgery

Costs can vary by type of procedure.

  • LASIK, the most common and affordable type, is ideal for most patients with farsightedness, nearsightedness, or astigmatism. It involves using a laser or a combination of a laser and blade to cut a thin flap in your cornea and then reshape it.
  • Wavefront LASIK is a more technologically advanced form of LASIK that uses wavefront light analysis to determine exactly how light travels through your eye, allowing the surgery to be more customized to your specific needs, and thus potentially produce better results than traditional LASIK.
  • PRK (Photorefractive Keratectomy) is the second most common type of laser eye surgery. It’s usually more expensive than LASIK. It removes tissue directly from your eye surface to change the curvature of your cornea.

The average cost of all these methods runs between $1500-$2500 per eye. (LASIK and PRK pricing is generally quoted per eye, because in the case of astigmatism only one eye may require the surgery.) The surgery is an outpatient procedure that normally takes about 10 minutes and is mostly painless. Recovery time is usually no more than 48 hours, so you can be back to work in no time.

Does insurance cover laser eye surgery?

Not normally. Under most plans, it’s considered an elective or cosmetic procedure. However, many larger insurance companies partner with providers to offer subscribers a discounted rate as a courtesy. Additionally, many large employers offer plans that cover at least part of LASIK costs. If you work for a major company, ask your HR department if any available plans might cover corrective eye surgery.

But there are special circumstances in which insurance companies may deem the surgery medically necessary and cover it.

Special circumstance #1: you need the surgery to perform your job.

This often applies to members of the armed forces who meet specific vision requirements and are willing to have the surgery done in a military facility. Civilians with important public service jobs like police and firefighters who must meet safety requirements can also make a case to their insurance companies that the procedure is necessary to meet the demands of their professions. Athletes who play pro sports and entertainers such as actors may be able to make a case as well.

Special circumstance #2: medical conditions

The other way you could qualify for insurance-covered LASIK is if you have a medical condition that makes wearing glasses or contacts dangerous or impossible, such as severe metal allergies, dry eyes, or a contact lens intolerance. These conditions, as well as an effort to wear glasses or lenses, must be documented; contact your insurance provider to learn more.

Corrective eye surgery financing options

Some providers offer in-house financing for LASIK and PRK. These providers generally don’t charge interest, so you can spread your payments out over many months or, in some cases, years without paying anything extra. This makes an affordable option – just make sure the provider is reputable and board-certified before you proceed.

Other providers partner with a financing company such as Care Credit. These companies administer the financing plan and offer long-term payment structures with fixed rates. You can also seek out your own financing, but before you commit to a personal loan, check with your surgeon’s office to be sure they are willing to work with your financing company of choice.

For some financing plans, a deposit may be required. (Learn more about how secured and unsecured loans are different.) Interest rates can also vary greatly by company and depend on your credit history. Some may rise above 20% in some cases. Remember to research all your options, and if an interest rate is involved, opt for the shortest-term financing possible so you can save money on interest in the long run.

Saving for vision care

If your employer offers a flexible spending account (FSA) or health savings account (HSA), take advantage. These types of accounts offer an excellent, tax-advantaged way to save for your LASIK or PRK procedure. They also allow you to contribute a percentage of your income to pay for medical care-related costs over a period of one year. Both HSA and FSA contributions are pre-tax and reduce your taxable income.

2017 FSA & HSA Limits

Eligibility Anyone with insurance through an employer People with a High Deductible Health Plan (HDHP)
Tax advantage for contributions Pre-tax Pre-tax
2017 yearly maximum (individual) $2,600 $3,400
2017 yearly maximum (family) $2,600 $6,750
Year-end rollover Generally, no – but employer may offer a grace period or allow up to $500 to carry over Yes

In 2017, the maximum an individual can contribute to an FSA is $2,600. (Note: this amount will likely not cover the full procedure cost for both eyes.) If your employer offers a Health Savings Account (HSA), you can contribute more than an FSA: $3,400 for individuals and $6,750 for family coverage. The downside is in order to have an HSA, you must be enrolled in a high deductible health plan. However, if you are young and in good health, this downside may be minimal. An upside to having an HSA is if you don’t use all the money in the account in one year, it rolls over into the next. Conversely, the majority of FSA funds must be used by year’s end or you lose them.

Other costs to consider

You’ll most likely have to purchase some prescription eye drops for after-surgery care. They are usually a combination of antibiotics and steroids, depending on the type of surgery you select. There are also eye drops that help with discomfort. Your insurance may cover the cost of these prescriptions; check your plan’s prescription drug coverage. You may also need artificial tears for a few months after surgery. These are over-the-counter, and you’ll likely have to pay for them out of pocket. They could end up costing several hundred dollars over time, so you may want to account for that cost when budgeting for FSA or HSA contributions.

Although laser eye surgery requires a significant financial investment as well as time spent researching providers and benefits, for many people, seeing clearly is worth the expense. If better vision is important to you, don’t dismiss the idea of corrective eye surgery too quickly. Research and careful budgeting can make this life-changing procedure fit within almost any budget.

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Affording Alternative Medicine

Every year, Americans pay billions of dollars for complementary, alternative and integrative health care — chiropractic adjustments, acupuncture, massage therapy, biofeedback and more. But with very few exceptions, insurance policies typically don’t cover these treatments.

Alternative medicine accounts for as much as 11.2% of total out-of-pocket spending on health care. Despite its popularity, insurers tend to view this type of care as untested, experimental or scientifically at odds with mainstream medicine. It’s one of the more glaring disconnects in American health care and — for the people caught up in it — surely one of the most frustrating.

The good news is, consumers of complementary and alternative medicine (CAM) have options to help make their health care more affordable. Read about them here, then follow up with your medical practitioner and insurance provider to see which course of action offers the healthiest — and most affordable — option for you.

Why alternative medicine?

The benefits cited by advocates of alternative, complementary and integrative medicine include:

  • Non-conventional treatments often focus on the patient’s health as a whole instead of isolating and eliminating a single cough or itch.
  • Alternative medical treatments provide options for those concerned about the cost of prescription drugs and, particularly in the case of pain management, the potential for dependency and side effects.
  • In addition to physical benefits, many patients see improvements in their mental and emotional health. Certain treatments may have the beneficial side effect of stimulating the body to release endorphins, for example, creating a natural state of euphoria.

Key concept: types of medicine

A look at differing perspectives on medicine and health care

Also called mainstream or traditional, this term describes approaches to health care based on Western medicine.

A non-mainstream approach used instead of conventional medicine. Examples may include homeopathy, naturopathy and traditional Chinese medicine.

A non-mainstream approach used as a supplement to conventional medicine. Examples may include massage therapy, yoga and meditation.

A coordinated strategy using both conventional and complementary health care. Treatments such as chiropractic manipulation are often included in integrative medicine.

This acronym stands for Complementary and Alternative Medicine and in some cases also refers to integrative medicine. Another catch-all term for alternative and/or complementary health care is body and mind medicine.

Making the case to your insurance provider

Just because a treatment isn’t specifically covered by your insurance policy doesn’t necessarily mean it’s off the table. Some CAM advocates recommend documenting your alternative care and filing a claim for reimbursement with your insurance provider.

Instead of simply mailing in copies of your receipts, ask your primary care physician and your CAM practitioner to help you compile additional documentation that specifically addresses your medical issues. The information you’ll send your insurance provider can include:

  • A Letter of Medical Necessity (LOMN) from your primary care doctor advocating the need for treatment based on the determination that it’s integral to your health
  • An official diagnosis and prescription for treatment from your primary care doctor
  • A detailed listing of the treatments and procedures accompanied by their Alternative Billing Codes (ABCs) applying to alternative health care services including chiropractic care, massage therapy and osteopathy.

Thorough documentation can help make the case for reimbursement. Ideally, input from your primary care doctor will show that your alternative care has a conventional medicine seal of approval. If your insurance provider initially rejects a claim, you may be able to appeal by supplying additional documentation.

Health care savings and financing

Health care savings accounts weren’t created with alternative medicine in mind, but they can be useful tools for qualifying out-of-pocket CAM expenses. Those expenses may include treatments and products such as chiropractic care, acupuncture and over-the-counter herbal or homeopathic medicines.

The various types of accounts are not interchangeable, and it’s essential to know the differences.

At a Glance: Health Care Savings Accounts

Flexible Spending Account (FSA) Health Savings Account (HSA) Health Reimbursement Arrangement (HRA)
Tax advantage Pre-tax contributions Pre-tax contributions Pre-tax contributions
Year-end rollover Up to $500 100% Employer’s discretion
Funding Employee/employer Employee/employer Employer

FSA (Flexible Spending Account)

  • May be offered through employer’s benefits plan
  • Employee contributes to account through paycheck deductions
  • Employer may also contribute
  • Can be used to help pay for out-of-pocket expenses
  • $2,600 limit on employee contributions per individual

HSA (Health Savings Account)

  • May be offered through employer’s benefits plan
  • Only available to people covered by a high-deductible health plan (HDHP)
  • Employee contributes to account through paycheck deductions
  • Employer may also contribute
  • Can be used to help pay for out-of-pocket expenses
  • $3,400 limit on employee contributions per individual; $6,750 limit for family coverage

HRA (Health Reimbursement Arrangement)

  • May be offered through employer’s benefits plan
  • Commonly paired with employer’s high-deductible health plan (HDHP)
  • Funded solely by employer contributions
  • Reimburses employees for out-of-pocket expenses and premiums
  • Limits on employer contributions vary according to type of plan

Pros and cons

PRO: Tax advantages
Health-care savings accounts offer tax advantages. Consider the potential tax benefits of an FSA as an example. With a yearly salary of $50,000 and a tax rate of 30 percent, contributing $2,000 pre-tax into an FSA translates to a $600 tax benefit.

CON: Rollover restrictions
FSAs require you to “use it or lose it” by the end of the benefit year, meaning that you would forfeit unused contributions above a $500 carryover allowance. Although HRAs generally don’t have this requirement, the employer can decide at the beginning of the year whether unused money can be rolled over. HSAs do not have “use it or lose it” rules, but they’re available only to those with HDHP insurance.

PRO: Availability
Availability of FSAs and HSAs has seen a general increase in recent years. For instance, an estimated 90 percent of employers offer FSAs.

CON: Eligibility restrictions
There may be strings attached when it comes to defining eligible treatments. An HRA could require extensive paperwork in filing claims for reimbursements.

Which one is right for me?

The list of IRS specifications on these accounts is long and complex, so get informed before making a decision. Talk to your employer to see what’s available and find out what kind of alternative care might be eligible. Also, ask your health care provider and financial advisor for a recommendation.

What about health care financing?

You may be able to finance some out-of-pocket expenses through a health care loan or health care credit card. Each kind of financing has advantages and disadvantages.

The key thing to remember is that most financing agreements aren’t designed to make purchases more affordable; they simply make the process of paying for them more manageable.

Health care loans

This form of financing for alternative health care may be available through a commercial lender. Zero-interest loans are rare, however, and the types of eligible treatments may be limited. Also, your overall creditworthiness can greatly influence your ability to get this kind of loan.

Health care credit cards

On the plus side, the application and approval process can be quick and easy. Some offers provide zero interest or low interest if you pay off the entire balance within a short introductory period. In general, though, you should always make your payments on time and in full to avoid late payment penalties and damage to your credit score.

Work with your provider

As the old saying goes, you never know what you can get if you don’t ask for it. Health care professionals, both conventional and alternative, may be willing to work out a deal that helps you control your costs.

Tips from consumer advocates include:

  • Ask if there’s a discount for paying your entire bill up-front
  • Ask about setting up an extended payment plan
  • Get help from a payment-assistance program

Above all, don’t be reluctant to ask any cost or payment-related questions you have about your treatment. It’s not just about money — it’s about your health and well-being.

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Financial Infidelity: 4 Steps for Healing Marriages Torn by Finances

“…for better, for worse, for richer, for poorer…”

Millions of Americans make those vows each year, but an alarming number of marriages end in divorce. In fact, it’s been estimated that the percentage of marriages ending in divorce could be as high as 40-50%. Of those unfortunate outcomes, a whopping 30% of divorced couples cite financial disagreements as the cause of their union’s demise.

We’ve talked a lot about what to do from a financial standpoint before you tie the knot, but what about after? What are some steps you can take to save a marriage torn by financial infidelity?

Here are some steps you can take after the damage has been done.

Step 1: Talk about it.

A 2014 survey conducted by the National Endowment for Financial Education found that 1 in 3 couples suffered from financial infidelity. That means that a spouse was lying to their significant other about debts, loans, credit, or anything else money-related. If your marriage is already suffering because of finances, being dishonest about money can escalate the problem further.

As awkward as you might think it is to discuss your debts and other financial information with your spouse, full transparency can go a long way toward saving your marriage. In fact, 42% of couples surveyed in a 2015 study reported feeling happier in their relationships when they discussed money once a week.

In the interest of transparency, there are questions you can ask your spouse to gain a better understanding of their financial patterns. Examples include:

  • How much debt are we talking about?
    Get it all out there and in the open. Then make a plan together to tackle your joint and individual debt. What’s the lowest credit card you can pay off outright? Are you eligible for student loan forgiveness?
  • Which one of you is more financially literate?
    Which one of you is more self-aware about the standing budget and what you need to buy versus what you want to buy? How can you work together to improve your finances as a couple?
  • How much do you make a month?
    Compare this to the monthly bills that are essential such as utilities and food to get a big-picture view of your monthly budget.
  • How much do you spend on the average day?
    Keep receipts or use a budgeting tool like Mint to track spending. It’s the only way to single out the non-essentials you can trim jointly or individually from your budget.
  • What are your income goals and milestones?
    Do you have an emergency fund? Have you thought about how much it will cost to save for retirement? Create a savings plan you can both get behind and work together to achieve your financial goals.

Once you’ve addressed these and any other questions you may have, it’s time to formulate a plan!

Step 2: Plan it out.

When formulating debt repayment plans, organization is key. You need to meticulously itemize your existing debt – both yours and your spouse’s – and then you need to figure out what the monthly payments are for each account. Then, because you should always pay a little more than the monthly minimum, determine how much extra you can pay per month to eliminate that debt once and for all.

How to eliminate debt as a couple

  1. Add up your total existing debt (car payments, student loans, etc.)
  2. Total up the minimum monthly payments for each open account.
  3. Compare that amount with your collective income.
  4. Determine how much beyond minimum payments you can budget for per month.

There are also plenty of tools that can help you manage debt, from our debt-payoff calculator to apps like Mint, which are designed specifically for budgeting.

Prioritizing payoffs

You can also try the Debt Snowball Method to prioritize which debt you’ll pay off first. This method is a phenomenal way to gain some perspective on your marriage finances.

First, you’ll list your current debt from lowest to highest and include minimum payments. If you are able to outright payoff the lowest balance in that debt hierarchy, great: you’ll have that much more money toward paying off the next item on the list. From there, the more money you free up, the more you have to pay-off the bigger items — and save on interest payments.

Of course your plan and your situation will vary, but having an organized approach to debt can work wonders for your marriage.

Step 3: Consult a marriage counselor.

A marriage counselor can help you address the underlying issues behind financial infidelity. As Dave Ramsey sums it up:

“There’s a certain kind of malice involved with financial infidelity. This is a huge breach of trust and can ultimately destroy both your marriage and your finances.”

Financial infidelity may be less about the money (or lack thereof) and more about communication breakdown and broken trust with the love of your life. Having a plan to address financial concerns in a marriage is only a temporary solution if the root cause of the financial infidelity is not addressed. That’s where consulting a marriage counselor can help.

Counseling costs and benefits

Most insurance providers don’t cover costs associated with marriage counseling. But it’s still worth a call to your provider to find out if treatment would be covered under your policy’s mental health benefits. Even if treatment isn’t covered, consider the emotional and financial costs of divorce. Counseling is an investment in the future of your marriage — and it’s tough to put a price tag on that.

If out-of-pocket costs of counseling are too burdensome, consider revisiting the idea once you’ve paid off one or more of your open accounts with the Debt Snowball Method mentioned above. You can simply reallocate a portion of that freed-up cash toward receiving the counseling you need. You could also create extra room in your budget by limiting impulse purchases. Opportunities for trimming your budget will become more obvious as you begin to track your spending together.

Step 4: Seek qualified financial advice.

Once you’ve determined the true cause of the financial infidelity and you’ve formulated a plan, it’s time to get a second opinion. Consider seeking out a financial planner. We’ve covered financial guru Suze Orman in the past, and her expertise is invaluable when it comes to finding a reliable financial planner. In a Money Matters piece, Suze gives her take on the criteria for finding a financial advisor with your best interests in mind.

According to Suze, you’ll want to meet the planner on their turf (their office space) rather than have the planner come to you. This gives you a chance to see how they organize their surroundings. This might seem superficial but, as Suze observes, a planner or advisor who can’t keep his/her own office in order can’t help you keep your life in order, either.

Another thing to watch out for is a financial planner who just asks about the money in your initial consultation. A good financial planner should consider all aspects of your life when helping you formulate a customized financial plan.

Suze concludes with probably the most important tip: pay attention to how the planner is compensated. Whether you’re looking for another set of eyes on your budgeting plan or starting one from scratch, having a clear understanding of fees and rates will help you avoid unpleasant surprises down the road. As a general rule of thumb, Suze recommends fee-only planners who charge a flat or hourly rate and are not involved in financial product sales. This can help ensure you’ll hire a planner who will act in your best interest.

It’s important to do your homework for this step. A good planner can help you turn your plan into actionable data that could not only get you out of the red financially, but also help heal your marriage.

Staying out of trouble

Now that you’ve taken the necessary steps to begin healing your marriage, take preventative steps to avoid history repeating itself.

Keep the conversation going

Lack of communication is one of the largest contributing factors to financial ruination of a marriage. One 2015 survey found that 22% of husbands and wives had recently made purchases they did not want their spouses to know about. Going forward, there needs to continue to be clear, frank, open, and honest discussion when it comes to spending and saving. You’ve already done the heavy-lifting to start the healing process. Don’t jeopardize your progress by repeating behaviors that got you in trouble in the first place.

Budget for fun

Whatever budgeting and debt paydown methods you choose, make sure you budget for fun activities you can enjoy together. Put aside some money for an occasional round of mini-golf or a night at the movies with the family. As Dave Ramsay put it, “It’s okay to set aside some time and money for yourself each month. Even a small indulgence can do wonders for your money morale.”

You’re more than a couple; you’re a team.

Managing your finances takes time, effort, and energy — and the same is true for a marriage. When your marriage is weighed down by money problems, pointing fingers isn’t likely to help. Instead, face your money worries as a team, and tackle them together. By creating a financial plan you both support and keeping the lines of communication open, it’s possible to improve your relationship and your financial outlook at the same time.

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A Simple Guide to Choosing a Strong Investment Option in Your Workplace Retirement Plan

Noelle writes in:

I finally decided to start saving for retirement using the 401k at work. I’m 39 years old. I have been trying to read up on retirement savings choices and it all seems so overwhelming. Even just opening up the 401(k) at work seems overwhelming. Help!?

Congratulations. That is the biggest, most important step for your retirement. The choice to have a little less money in your checking account right now in order to have some put aside for retirement is a challenging one, one that many Americans simply avoid until it’s too late to really make a difference. You stepped up, and that’s commendable.

Now comes another challenge, one that seems to be an incredibly confusing one. When you sign up for your workplace plan, you’re going to be asked – or already have been asked – where to invest that money (most of the rest of the application is easy – personal information, mostly). The human resources officer at your company that’s working with you on this might have suggested an option or two, but you’re not sure if that’s the right option. There are tons of numbers and documents and other things to look at and it feels more than a bit overwhelming.

Right here is the point where many people lock up. They essentially don’t make a choice at all or accept a default choice that isn’t very good. Sometimes, people end up with their entire retirement savings in what amounts to a savings account, returning only a few dollars a year.

The fear that you’re going to make a huge mistake with your retirement investment choice is a sensible one. There are horror stories out there, stories of the stock market crash of 2008 where people lost half (or more) of their retirement savings all in one fell swoop. The idea of saving for years and then seeing half of it disappear all at once is intimidating, to say the least.

Here’s your gameplan. I’m going to keep it short, sweet, and simple.

First of all, every single “bust” or “bubble bursting” in investment history has been followed by a big boom unless literally the government is collapsing and taking whole industries down with it. Why? Over time, businesses constantly innovate and, at the same time, there are constantly more customers around the world (more people are being born than dying). At the same time as all of that, workers are gradually becoming more and more productive. Add all of that together and buying shares in stable companies is going to be a long term money maker.

Aha, but what about unstable companies?! What if you put your money into stocks and discover that you’ve bought into the next Enron or some other huge company that just collapses? Aren’t you just out of luck?

Not really. Almost every investment offered to you is going to be some kind of a mutual fund. A mutual fund is when a large group of people – all of the people everywhere that are in the same retirement plan as you, and probably people beyond that – pool all of their money together and invest together. That mutual fund takes that money and buys shares in lots and lots of companies, so for every collapsing Enron, it also will have money in Google and Coca-Cola and many other things. The exact companies that a mutual fund chooses varies from fund to fund, but that’s the purpose of all mutual funds. They spread out the risk a little bit so that no one loses everything.

When you actually make an investment choice, you’re not buying shares in a company. You’re buying shares in some kind of a mutual fund. Imagine that share entitles you to some small fraction of ownership of that whole mutual fund, which is invested in hundreds and hundreds of companies. Whenever one of those companies goes up in value, your mutual fund goes up a tiny amount. Whenever one of those companies goes down in value, your mutual fund goes down a tiny amount.

When times are good, most companies are rising in value and thus your mutual fund will rise in value, and that’s how things are most of the time. There are times when the overall stock market falls and, yes, your mutual fund shares will drop in value, but as I explained above, unless the whole government and tons of industries are all collapsing, they will rebound eventually. That’s the engine of capitalism at work.

The point is this: over the long term – more than 10 years or so – stocks have historically been a good investment almost everywhere in the world almost always throughout history outside of historical events where nations are collapsing. If that’s the case, you have bigger worries than your retirement fund.

Over the short term, you can get caught in a period where stocks are falling, which is why it’s a bad idea to ever put money into stocks if you’re going to be taking it out in the next few years. You might get caught in a downturn.

So, what’s the advice, then? If you’re more than 10 years away from retirement and don’t think that the United States is going to literally fail as a nation in the next several years, stocks are a reasonable place to put your retirement money.

The same philosophy is true with any investment that goes through up and down periods but largely points upwards. Real estate goes through similar cycles – mostly upwards, but with occasional dips. Bonds do as well, though their valleys aren’t as bad as stocks and real estate and their peaks aren’t as high.

Although I’ve established that most of the options in your retirement account are reasonably safe if you have a lot of years left until your retirement, it doesn’t answer the question of which one you should invest in.

I’m going to keep it extremely simple: unless you want to dive into some number crunching, your best option is to look for a “target retirement fund” and put all of your money into that. A target retirement fund is a mix of different kinds of investments that’s focused based on the year you expect to retire. In other words, when you’re far from retirement, it’s mostly full of aggressive things that have a high average annual return but sometimes have huge dips, like stocks and real estate. As the years pass and you grow closer to retirement and into retirement, it gradually moves into safer and safer things – that means lower average annual returns, but it means that the dips aren’t nearly as intense.

Basically, it’s a one-stop shop. Unless you want to spend a lot of time comparing different investment options, it’s a strong default choice.

One final thing: If your workplace offers matching funds, contribute enough to your retirement to get every dime of it. If they offer to match every dollar up to a 10% contribution from you, contribute 10%, even if it seems hard. Why? That match is essentially part of your salary and if you don’t contribute enough, you’re essentially telling your employer, “No, I don’t want part of my salary, you keep it.” It’s money that they’re pledging to contribute to your retirement provided that you contribute, too. So get every dime of it!

If your workplace doesn’t offer matching, I recommend saving 10% of your income, or even a little more if you’re over 40 and haven’t contributed anything yet.

Now, obviously, I’ve chosen to simplify a lot of things here. I’ve brushed away a ton of details in order to make the choices stark and clear, but if you’re curious and you want to start digging into the details, I highly recommend starting with The Bogleheads’ Guide to Retirement Planning, which is the best single guide I’ve read on retirement. This is a pretty heavy book – you’ll want to move through it very slowly if you read it and you’ll probably want to visit Wikipedia and Google as you do so – but if you’re wanting to dig deeper into your retirement choices, that’s the best single book you can read.

Regardless, the best single move you can make for your retirement is to start saving now, even if you’re not necessarily choosing the “best” option. Get signed up, pick the target retirement plan that’s closest to your retirement year, and start pushing money in there. Remember, if you later discover that you want to do something else with your money, you can quite easily move it to another investment with little worry, but you can’t get these opportunities for contribution back. You will never, ever again have as many years until retirement as you have now, and the more years you have, the more years that the power of compound interest can work in your favor.

Good luck!

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Thursday, June 1, 2017

Happiness, Low Stress, Pleasure, and a Firm Financial Foundation

It’s likely that at some point, you’ve heard of Abraham Maslow’s well-known hierarchy of needs. If you’re unfamiliar with the idea, let me summarize it for you.

In 1943, Abraham Maslow published a hugely influential article in the journal Psychological Review entitled “A Theory of Human Motivation.” In that article, which has been referenced and cited more times than a person can scarcely imagine, Maslow argues that almost all human needs break down into five groups:

  • Physiological needs, including such things as food, water, warmth, and rest
  • Safety needs
  • Belongingness and love needs, including intimate relationships, friendships, and family ties
  • Esteem needs, including prestige and feelings of accomplishment
  • Self-actualization needs, including achieving one’s full potential, creative activities, and so forth

Maslow argued that these needs are arranged in a hierarchy. You can think of it as a pyramid, with physiological needs as a broad base of that pyramid, with safety needs as the next layer up, then belongingness needs, then esteem needs, then self-actualization near the top of that hierarchy.

In Maslow’s hierarchy, people are primarily focused on just the layer of the pyramid that rests atop layers that they feel very secure in. So, for example, a person who only feels secure in their basic physiological needs is mostly concerned with personal safety and security and a person who has everything else fulfilled will focus on self-actualization.

He also argued that when a lower layer in a person’s hierarchy is disrupted, it is very jolting and traumatic to that person. For instance, when a person who is mostly focused on self-actualization needs suddenly finds themselves unsafe or lacking basic food and water, it can have a huge psychological impact on them and cause them to make some really strange and poor choices. It can bring about a strong sense of sadness and emptiness in life as well.

Quite often, when an otherwise healthy and successful person begins to feel an emptiness or sadness in their life, it’s because there is some ongoing disruption in their hierarchy of needs, and that person often becomes prone to making poor decisions because of that disruption. They feel something is off, but because their focus is on a different level of need in their life, they often really don’t know what that is, and they take actions intending to “fix” what’s missing and just completely miss the mark.

This brings me right back to my experience at a car dealership the other day. I stopped in to get a free factory recall fix done on an automobile of ours when I overheard a couple discussing which car they were going to buy.

One member of the couple felt they should be looking at used cars, while the other was basically uninterested in such considerations. As I listened to their conversation, it became readily apparent to me that they were currently focused on two completely different parts of their hierarchy of needs.

The person arguing for the used car was making the case that they simply couldn’t afford it. He was speaking about physiological needs and security needs. He was wondering how they were going to be able to pay the bills.

The other person, the one looking only at new cars, was very focused on esteem needs. That person was talking abut how he wasn’t going to be driving a used car to work and that such a thing would be unacceptable to his prestige there. He mentioned that everyone in his workplace drove a new car and many of them were driving a nicer model than they were looking at and that he was compromising by even looking at this mid-level model.

The partner looking at the new cars then walked away and I could see a mix of frustration and sadness on the face of the partner advocating for the used car.

For me, that conversation couldn’t have stood out any bolder if they had been shouting at each other with bullhorns instead of having a private and semi-quiet conversation with each other. Here, right before me, was a perfect example of what happens when different levels of needs begin to come into conflict.

It’s misery.

Here’s the thing, though: Our money choices and our spending decisions cause a ton of internal conflict in our hierarchy of needs. Those conflicts often end up putting us in a miserable life position.

Let me start off explaining why by giving you an example from my own life.

When I was first thinking about my financial turnaround, it was mostly driven by this weird sense of unease in my life that I couldn’t quite put my finger on. I actually wrote about that exact unease in an article entitled September 23, 2005, in which I shared my personal journal entry from that date. I felt really uneasy and unhappy with my life and I didn’t really know where it was coming from. I just felt massively unhappy and uncertain and I was completely incapable of pointing to the source of those feelings.

The reason was that I was focused entirely on esteem and self-actualization while I was doing real damage to the security and even the physiological needs in my hierarchy. I was doing things with my time and my energy and my money that were meant to boost my sense of self-esteem and self-actualization, but those choices were eating away at the deeper foundations of basic financial security and even basic personal needs.

I just didn’t see it at all.

The things I was spending my time and money on were all centered around my self-esteem. My career. My sense of prestige in my career. My intellectual interests.

However, in doing that, I was slowly eroding my financial security. I was eroding the long-term security of everything I relied on, from my housing to my car to my food. I was overspending in an effort to chase some kind of higher state in my hobbies and interests and career prestige and that overspending was eating away at the foundations that all of it rested on.

Even worse, because my “eyes were on the prize” all of the time, I didn’t see the weakening foundation. I felt it trembling under my feet, but my eyes were looking up in the sky. I felt uncertain and a little scared and very stressed, but I didn’t really see why I felt that way.

It took a big financial earthquake, one that would hit about eight months later, to get me to really rethink things and reevaluate my life. However, so much confusion and uncertainty and stress would have been avoided if I had just looked at the ground. If I had sat down and taken a serious look at my more basic needs and how they were starting to crumble, things would have been so much better for me in that time frame.

So, where am I going with all of this? It is my belief that looking at one’s life through the broader lens of this kind of hierarchy of needs reveals a few deep truths about money and personal happiness and fulfillment.

Truth #1: Unease and unhappiness about life, for most people, points to an erosion of a more basic level of life’s needs.

I see this crop up over and over again in my own life. I often see it pop up in the lives of others, as I described in that example above at the car dealership. I hear friends talk about their lives, too, and I see this same thing playing out, time and time again.

When people feel uncertain and unhappy in their lives and they can’t quite put a finger on it, there are two potential culprits. Either there’s a burgeoning health – physical or mental – issue or else they’re facing some sort of a challenge to some of their basic needs when their focus is not on those basic needs (or both, I suppose).

(I’m not going to directly address mental health or physical health concerns in this article. Health concerns are serious business and far beyond what I can or should address here. If you are feeling serious unease and unhappiness in your life and you’ve spent time trying to find the source of it without success, you should absolutely seek the consultation of a mental health professional or doctor. For the rest of this article, however, I’m going to focus on situations that involve normal uncertainty and unease and unhappiness that’s connected to a personal crisis of needs.)

If you feel unhappy with how things are in your life or where things are going in your life, step back and take a serious look at your basic needs. Are you physically well? Is your health starting to slip? Are you saving for your future? Are you consistently spending less than you earn? Do you feel safe at home or in the rest of your daily life? Are the core relationships in your life strong and secure?

If the answer to any of these questions is “no,” then your self-esteem and self-actualization (meaning things like your hobbies and intellectual interests and your sense of your place in the world) are on shaky ground. Those kinds of things rely on more fundamental needs being fully met. If those needs aren’t fully met, then focusing on things like your career standing or your hobbies can feel very hollow or stressful, whether you feel the source of it or not. Activities that were once deeply fulfilling now feel merely like havens from a sense of unease in the rest of your life, because for those types of things to actually be fulfilling, you need to be on strong ground in the rest of your life.

So, what can you do about this?

Truth #2: Putting basic life needs first and putting effort into making them as strong as possible makes exploration and fulfillment of higher needs (and the whole of a person’s life) much more fulfilling.

Simply put, you start with the basics. You put other matters in your life into the backseat for the moment and you fix the problem.

This is where the idea of a “financial turnaround” comes from.

When I described my pre-turnaround life earlier in this article, I was feeling a deep unease about my life, and it was only through addressing more fundamental needs – security and safety being a big part of it, but also simply ensuring I had steady sources of food and shelter for me and my family – that I was able to resolve that sense of unease. I was extremely lucky not to have everything crash under me. Instead, I just felt rumblings that came from being on very unsteady ground and I was able to take action before the whole hierarchy of needs came tumbling down.

That sense of unease in my life was only resolved when I put aside all of my higher “needs” related to self-actualization and got down to the important work of ensuring the stability and security of my life going forward.

So, let’s turn the tables. What exactly do you do if you’re feeling a sense of broader unhappiness and unease in your life? The first step is to spend some time really evaluating those basic elements of your life, starting from the ground up, as mentioned above. Be deeply honest with yourself about these things. Don’t be afraid to sharply criticize yourself, because it’s only through admitting that something is wrong or that something isn’t how you want it to be that you can begin to fix it.

As listed above, look at things like your current financial state, your level of debt, your retirement savings, your health, your weight, your sense of feeling physically good, your energy levels, the safety and security of your day to day life, and the strength of your most valuable relationships. Are those things in really good shape? Can you say that honestly and sincerely?

Once you’ve found some weak points, and almost everyone will, you need to come up with a plan to fix those points. The Simple Dollar largely focuses on strategies for fixing financial situations, but you can find help with almost all of those other core problems, too.

While you’re doing that, put some of your other life issues on hold or at least downgrade their importance. When the foundations of your life are on shaky ground, it’s time to stop spending several hours a day reading websites or watching television. You need to be putting effort into building a firm foundation so that you can actually do the things you want to do with joy.

This touches directly on the next truth.

Truth #3: If fulfilling a higher level need undermines a lower level need, you’re probably making a mistake.

In modern life, we often find ourselves mostly thinking about our highest level needs – our self-esteem and self-actualization. Do we have a good community or professional reputation? Do we have hobbies and other things going on in our life that engage us and interest us? Those are wonderful and important questions to answer.

However, sometimes in the process of answering those questions, we directly undermine those lower level questions. We spend too much on our hobbies in a chase for self-actualization. We spend too much on a shiny car or a nice work wardrobe in a chase for self-esteem.

Again, there’s nothing wrong with those steps on their own, but nothing in your life exists in a bubble. The thing to remember is this: every time you give some of your life’s resources to those higher level needs, you’re not giving those same resources to lower level needs. You’re assuming that those lower level needs are thoroughly taken care of.

The problems come in when those lower level needs aren’t fully taken care of. If you feel like you’re walking a financial tightrope in your life and you’re still spending money on comparatively unnecessary things, you’re undermining your basic needs and, on some deep level, it probably feels wrong. The same is true if you’re eating really tasty but unhealthy foods (a self-actualization thing) but undermining your basic health (a very basic need).

If you’re taking actions for fun and personal pleasure that are undermining the basic needs of your life, stop. Put them on hold. Get the basics of your life straight first. Otherwise, you’re just filling up the pleasures of life with a lot of guilt and uncertainty and sadness.

Truth #4: Money is strongly tied to very basic levels of need, including safety, security, and basic physiological needs.

Money, because it can be exchanged for a lot of things in life, plays a key role in all of this. You can use money to take care of your most basic needs – food, shelter, clothing. You can use it to give yourself some long-term security by saving for retirement. You can use it (to a degree) to help you build relationships, to build your self-esteem, and to help you explore your interests and passions. Money is a part of all of these levels.

The reason most people get into financial trouble is that they route their money poorly amongst those different levels. They spend too much on interests and passions and not enough on long-term personal security. They prioritize today’s shiny car – something near the top of the pyramid – over saving for retirement – near the bottom of the pyramid.

That, to me, is the beauty of personal finance. We have a lot of freedom with regards to how we use our money and because of that, we really can build the kind of life that we want. The catch, of course, is that we have to have the self-awareness to realize that a huge part of building that life that we want is having a strong foundation underneath it. We need to be secure in those core things, that we have food on our plate and shelter over our heads and basic clothes on our back and will be able to continue to do those things for quite a while.

All of these things add up to a single, final truth.

Truth #5: Making sure your money needs are taken care of provides a strong foundation for self-esteem and self-actualization, and thus enjoyment of modern life.

If my financial turnaround taught me one thing, it’s this: Things like self-esteem and hobbies and personal interests are deeply undermined if your finances are in disarray. You can still somewhat enjoy them, but it’s an enjoyment that’s constantly undermined by the stress and worry that comes with not having your life’s basics in order.

When you do have the basics in order, when you do have a firm grasp on your debts and you’re spending less than you earn and you’re beginning to build some long term financial security in order to ensure that you will have food on the table and a roof over your head and clothing on your back for quite a while, no matter what happens, there is a huge amount of stress and worry and distraction that just evaporates from your life.

When that stress and worry and distraction leave, it becomes so much easier to enjoy those higher level things. You can focus on them and deeply enjoy them without worry and stress undermining things in your life.

With that, I’m going to close with a little comparative story between my life now and my life then.

I’ve always been a deep lover of reading and learning and one of my biggest off-and-on interests has been the philosophy of self-reliance. Writers like Seneca and Marcus Aurelius and Henry David Thoreau and Ralph Waldo Emerson have had an enormous impact in my life.

During the times in my life when I’ve allowed the basics of my life to go astray, I was completely unable to get into the mindset to enjoy those books and essays. I’d read them, but nothing would click. I couldn’t do it. I couldn’t focus enough.

As I close this article, the very next thing I’m going to do is spend about an hour reading a collection of Emerson essays with my children piled around me reading their own books. This group reading time is something of a family tradition. Perhaps more than ever before, I can get thoughtfully lost in those writings. Why? My foundations are secure, and because of that security I can enjoy my hobbies and passions and relationships with a deepness and richness that I couldn’t achieve before.

Good luck.

The post Happiness, Low Stress, Pleasure, and a Firm Financial Foundation appeared first on The Simple Dollar.

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The DOL Fiduciary Rule: What Does It Mean for Your Money?

When you hire a financial advisor to help you manage your money, they’re recommending the best investments to help you achieve your financial goals, right? Well, not always, and that’s one reason for the Department of Labor’s Fiduciary Rule, expected to go into effect this month.

Despite confusion over how the DOL Fiduciary Rule will be implemented — and efforts to stall its progress — it appears a version of the law will go into effect on June 9, according to a recent Wall Street Journal op-ed by Labor Secretary Alexander Acosta.

“We have carefully considered the record in this case, and the requirements of the Administrative Procedure Act, and have found no principled legal basis to change the June 9 date while we seek public input,” Acosta wrote. “Respect for the rule of law leads us to the conclusion that this date cannot be postponed.”

And with this statement, an era of uncertainty is born. For every positive the new fiduciary rule brings to the table, critics worry there will be consequences as well.

What Is the DOL Fiduciary Rule?

In case you haven’t heard about the DOL fiduciary rule, here’s the gist of it: The Obama Administration came up with the idea of a fiduciary rule that governs financial advisors and other financial professionals. The rule, which has shape-shifted a few times since then, was intended to govern best practices of financial professionals, requiring all financial professionals to be elevated to the standard of “fiduciary” – meaning they must act in the best interest of their clients and disclose any potential conflicts of interest.

“The fiduciary rule will help to ensure that financial institutions act in investors’ best interests when providing retirement advice,” notes Seth Rosenbloom, associate general counsel at Betterment. “Effective June 9, the rule requires anyone who provides retirement investment advice for a fee to act in the best interests of their customers. Additional investor protections will go into place in early 2018, unless the rule is modified or delayed by the Department of Labor.”

Since all fiduciaries are legally and ethically required to act in the best interests of their clients, the rule is intended to help the average investor. As a fiduciary, a financial advisor would be required to manage a client’s assets in a way that that best serves the client, rather than for his or her own profit. That means fiduciaries can’t benefit directly from the management of assets — for example, by recommending an inferior investment product because it pays a higher commission. They must also be completely transparent throughout the investing process, taking special care to avoid any conflicts of interest.

All fees charged by financial advisors after the law is implemented must be shared with specific dollar amounts to all clients in their care. As such, the new rule could effectively eliminate many of the commission structures that currently dominate the financial industry.

Advocates for the law say it will protect average investors and help future retirees save money by reducing fees and red tape. The law would also make it perfectly clear whether financial advisors are fee-only — that means they give unbiased money advice for a flat fee, as opposed to taking a commission on particular investment products — and how they’re ultimately getting paid.

Critics of the law offer the opposite view – that a new law on the books will only increase red tape, and the burden of compliance may push some advisors out of the field. They also claim that the new law could be expensive, effectively increasing costs for investors across the board.

The Trump Administration has delayed the rule so far, citing issues with regulation and worry over implementation. Administration officials also worry that the cost of compliance will be damaging to both financial professionals and investors.

“The basis behind the delay might be due to the current administration’s statements moving towards fewer regulations across the financial services,” says Robert Kirk, vice president and principal consultant in the wealth management practice at Mphasis, a large IT services shop.

“Officials, including the president, have stated their views that more regulation negatively impacts investors because the cost of compliance will be passed through to the individual Investors,” says Kirk. “In turn, this may not help empower Americans but rather hinder them and their access to the right financial advice, products, and services.”

Why Some Financial Advisors Say ‘Yes’ to the Rule

Will the fiduciary rule hurt or help? It depends on whom you ask. According to Rosenbloom, it all boils down to education – as in, individual investors need to become educated on how the financial services industry works.

“Many investors are unaware that their retirement account managers and advisors are currently under no obligation to act in their best interest,” says Rosenbloom. “These money managers consider whether a particular recommendation will result in a higher commission or kickbacks to them, rather than just whether the recommendation is right for a particular investor. As a result, investors working with money managers that are not bound by the fiduciary standard are likely to end up in a sub-optimal and higher-cost portfolio.”

Rosenbloom and others at Betterment agree that the fiduciary rule is a necessary step toward improving retirement outcomes for millions of Americans. The fiduciary rule will “eliminate problematic practices in the retirement advice industry,” he notes. “The rule is part of the industry’s shift toward ensuring that everyone receives honest and high-quality retirement advice.”

Some other financial advisors I spoke to agree with the sentiment that, despite the upfront growing pains and hassle of compliance, a rule needs to be in force.

Matthew Jackson, president of Solid Wealth Advisors and author of Solid Wealth Blog, says that, if the law never takes shape, opaque fees will remain the norm.

“Lack of transparency in our industry causes a decrease in trust from our clients,” says Jackson. Ultimately, he says, it’s the client who gets hurt the most. Either they disengage from the system and don’t hire a financial advisor. Or, they ignore their finances and investments because they don’t trust the advice they receive.

Financial advisor Joe Carbone of Focus Planning Group and popular blog Social Security Teacher believes the problem runs much deeper than that, however. We need a law on the books, he says, because the public is confused.

“What makes me sick is my industry is to blame,” says Carbone. “We have done everything possible to confuse and deceive the public. Just think about how many titles we have… Financial Advisor, Financial Planner, Wealth Manager, Wealth Advisor, Money Coach, Wealth Coach,” he says. “And I can keep going.”

“In a free society,” says Maryland-based fee-only financial advisor Martin A. Smith, people deserve to know the truth about the financial professional they hire to manage their assets. Freedom, he says, is “being able to choose whether they prefer to work with a financial professional who essentially does not have to put the interest of their clients before their own interests, or that of the firms which they represent.” How can we give people the ability to choose when the financial services industry is currently set up to fuzzy the lines as much as possible? We can’t.

Passing the fiduciary rule is “the right thing and the ethical thing do,” says Kansas City-based financial planner Clint Haynes. “When a client isn’t aware nor told that a conflict of interest exists, then there’s clearly an ethical issue facing that advisor, whether they want to accept it or not.”

Would you send your sweet grandmother to a fiduciary, who is going to put her interests above their own? Or to someone who might recommend a less suitable investment — perhaps one that pays advisors a higher commission — knowing there’s the possibility of a conflict of interest?

“I think answer is quite clear,” says Haynes.

Fiduciary Rule or Not, Here’s What You Should Do

While the new fiduciary rule should fall into place this month, the full-scale implementation of the law may take years. Further, government officials plan more negotiations on the law – negotiations that could water down its protective features.

Chicago-based financial planner Roger Wohlner says that, law or no law, it’s up to each of us to find a financial advisor who works in our best interests. If you’re already working with a fee-only advisor who is a fiduciary, he says, the new rules are more “hype than substance.”

Fortunately, “there are tens of thousands of financial advisors who have willingly chosen to be a fiduciary,” notes Taylor Schulte, financial planner and founding member of the San Diego Financial Advisors Network.

“You don’t need to wait for a law to pass to get objective, conflict-free advice,” says Schulte. “The firms these financial advisors represent are also known as fee-only. A quick Google search or a visit to NAPFA.org will reveal the firms near you that adhere to these standards.”

Regardless of what happens with the fiduciary rule, protecting yourself – and your money – starts with knowing which questions to ask. When considering a financial advisor or vetting your current one, start asking the right questions, says Rosenbloom.

For example, who makes money from your account? And how much? Does your advisor make more money for recommending certain investments over others? Are they committed to putting your interests about their own at all times?

“You shouldn’t be embarrassed to push, and if you don’t get the answers you want, it’s okay to walk away,” says Rosenbloom. After all, a true fiduciary should have no issue answering those questions and others. But, if you see your advisor squirming in their seat, you’re right to worry.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

Related Articles:

Are you worried about the impacts of the DOL Fiduciary Rule? Why or why not?

The post The DOL Fiduciary Rule: What Does It Mean for Your Money? appeared first on The Simple Dollar.

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