Six months ago I wrote a post about calculating the benefits of dual coverage. At the time, my employer was switching health insurance plans so that my husband and I would both have Anthem through our employers, and he would have dual Anthem coverage with different benefit levels. Once we learned he was scheduled for surgery, I called to find out how the benefits would be coordinated under two Anthem plans. What Anthem told me was completely incorrect, but it worked in our favor. So here’s how it really works.

Coordination of Benefits Under Competing Insurers
Previously, my employer offered United and my husband’s employer offered Anthem. Under that plan, United paid for anything Anthem didn’t cover, except doctor and prescription co-pays. Under those plans, he paid the Anthem co-pay level, which was sometimes higher, sometimes lower. We ended up paying nothing for tests and treatments beyond the initial co-pay.

Coordination of Benefits Under the Same Insurer with Different Plans
When I called Anthem to find out how it would work, I was told that he’d need to pay the higher co-insurance and deductible on his Anthem plan before my Anthem would cover anything. This is completely incorrect. Instead, it works exactly as if they were competing insurers. We pay doctor and insurance co-pays, but nothing else. So far the hospital bill alone has come to $277,000 (cost before insurance). To date, we’ve paid $60 in doctor co-pays and $200 in prescription co-pays, which is coming out of our FSA.

Here’s how it works:

Hospital submits claim to Anthem A (husband’s plan). They pay 70% of the bill up to the out-of-pocket max, after which they pay 100%. His out-of-pocket maximum is $4000 and his deductible is $2000.

Anthem A pays the hospital 70% of the negotiated rate. So, if it was a $1000 negotiated rate, they would pay $700. Since it was $277,000, they paid $100,000 of the negotiated rate of $104,000. If we didn’t have secondary insurance, we would have been billed for $4000.

The hospital sends the entire claim to Anthem B (my plan). Anthem B pays 90% of the negotiated rate. If it was $1000, they would pay $900, except Anthem A already paid $700, so Anthem B would pay $300. Since the negotiated rate was $104,000 and the Anthem A paid $100,000, Anthem B paid the remaining $4,000. We get billed for nothing.

Now that the $4,000 out-of-pocket max and the $500 deductible on my husband’s plan have been exceeded, Anthem B won’t receive any more bills. Anthem A will pay it all.

So, if my husband’s employer didn’t generously provide him with free health insurance, and my employer didn’t generously provide both us with free health insurance, we would have either been responsible for $4500 (his plan) or $2500 (my plan.) We were actually responsible for $0.

The downside is that we relied on what Anthem told me when setting our FSA contribution for the year and now have to figure out how to spend $2000 by December 31. We’ll find a way, it just wasn’t something we planned on.

Coordination of Benefits Under Same Insurer, Same Plan
If you both work for the same company, then you have the same plan and are only covered once each. You can’t double up under the same plan. If you have a $4,000 out-of-pocket max, that’s what you have to pay.

Doing Your Own Insurance Calculations
So, if one or both of your employers offer free insurance for one or both of you (and dependents), there’s no reason not to take it. If they offer you a bonus for declining coverage (and the declining spouse and dependents have alternative coverage), figure out if the bonus would cover the deductible gap if you did have a major medical bill. For example, if you’re offered $300 a month to decline coverage for the your spouse and two dependents, and have a $4000 out-of-pocket max under the other plan, you’d almost break even in the event of one major medical event. You’d come out ahead if there are none.

However, if you have to pay a premium for coverage from one or both employers, the premium cost may exceed any benefits you’d receive through coordination of benefits. For example, if you have to pay $2500 a year for an extra $4000 in coverage, you’d be better off putting the $2500 in your emergency fund.

This weekend I snagged on a good deal on a roasting pan. It was on sale at Bed Bath & Beyond for $20 with a $10 mail-in rebate. In addition, I was able to use one of their $5 of $15 coupons on the purchase. That will bring my total cost down to $6.46 (including tax) for an 18” roasting pan with rack. If you want one, the rebate goes through 12/31/2010. It was a fantastic deal, but I only jumped on it because I knew it was the right time.

When Is a Good Deal Worth It?
I don’t jump on every good deal that comes my way. For example, this week I’m snapping up deals on Coke, vegetable oil, peanut butter, and Tums. Last week it was tomato sauce and a roasting pan. However, I don’t jump every time I see a deal. For example, a few weeks ago Cost Plus had ceramic rectangular baking pan for $10. Not a bad price, but not worth buying because I already have a ceramic baking pan.

Here are my guidelines for jumping on a good deal:

Immediate necessity. I don’t actually need the pan this week, but I know I will need it soon. So, it passes the first test.

Repeated use potential. This is a roasting pan, so I know I will use it repeatedly. I see lots of good deals in Target ads that would be fun to have, but they might not be things I’d get a lot of use out of, so I don’t rush out to buy them.

Not duplicative. If I’d jumped on the ceramic baking pan deal, I would have been duplicating something I already had, in fact something I’d bought just two weeks earlier. While I already have a roasting pan, it’s not a good one. This year, my family came to my house for Thanksgiving and my mom had to bring her roasting pan with her. She inherited her pan from my grandmother, but obviously that’s not likely to happen in my case for another 20-30 years, too long to wait for a roasting pan that actually fits a turkey.

Will be used quickly. This one applies to food. I only buy enough of a good deal that I’ll be able to use it all before it expires. I use a lot of peanut butter, so I always snag those deals.

When Is a Good Deal Not Worth It?
The primary time when a good deal isn’t worth it is when it’s not really that good a deal. It might seem like a deal, but if you follow prices, you know it’s really not. For example, at Christmas, I got 40 rolls of toilet paper for $10. That was a good deal at my local stores. I’ve also seen deals where the toilet paper would have been $15 – not quite as good a deal because I know it will go lower.

If it’s something you don’t need and don’t have a use for, then it’s also not a good deal. The ceramic baking pan is an example. I needed one, so I bought one I liked at a good price. I didn’t need two, so I didn’t buy a second one.

There is also the issue of storage. When I lived in an apartment, it wouldn’t have been as easy to stock up on the toilet paper deal. I probably still would have, because I could stuff it into various crannies, but I probably would have held off on the roasting pan due to storage problems. If you don’t have room for the stuff you buy, then it’s not a good deal.

Finding Deals that Are Good for You
I carry a little notebook with my everywhere. One of the items in that notebook is a list of things I need to buy for my house or for myself. Then, every Sunday I check out the weekly ads for the stores I know are likely to carry those items. I quickly scan for items on my lists. If I see a good deal, I add the store and the item to my weekly to do list. If there’s a coupon for the item, I put it in the pocket at the back of the notebook. By comparing my list to the ads, I’m less tempted to jump on deals that don’t really work for me.

Recently I received a copy of Mind Over Money: Overcoming the Money Disorders That Threaten Our Financial Health by Drs. Brad and Ted Klontz. If you’re familiar with Suze Orman, then the basic tenet that we’re all influenced by money lessons, or money scripts, that we learn as children will be familiar. The doctors identity several common types of scripts and provide exercises for overcoming them.

Part 1: The Big Lie
Part one details all of the forces that influence our relationship to money. The primary force is simply our animal nature. The human brain still carries some reptilian and simian aspects that make it difficult for us to have a purely rational relationship to money. Instead, we react emotionally, and that can lead us to make bad choices. In addition, our human penchant for mimicry, which is how we initially learn to speak, leads us to internalize our parents’ negative money scripts, often to our own detriment.

The doctors explain not only how that wreaks havoc on our own lives, but on the lives of others and our financial system. This book was written in midst of the financial collapse, and some of their conclusions are quite fitting to our current economic state.

Part 2: Money Disorders
The meat of the book is part two, which outlines several money disorders that may strike all of us. Some of them may seem to be beneficial, but they can be harmful when carried to an extreme. If you’re deeply afraid of financial risk, excessively frugal, or the reverse: always taking excessive risk or overspending, you may have a money disorder, but these aren’t the only types of disorders.

Money-Avoidance Disorders include: financial denial, financial rejection, underspending, and excessive risk aversion.

Money-Worshipping Disorders include: hoarding, taking unreasonable risks/gambling addiction, workaholism, overspending/shopping addiction.

Relational Money Disorders include: financial infidelity, financial incest, financial enabling, financial dependency.

As you read through the book, you’ll probably recognize some of these traits in yourself. Although we don’t all have severe disorders, we probably each battle some unhealthy money attitudes. Or, you and your spouse could have opposing disorders or attitudes that wreak havoc on the marriage and family finances.

The Relational Money Disorders were the most interesting to me. Financial infidelity is probably one the most common – that’s hiding money or spending from your spouse or partner. Financial incest is when parents use money to control their children. Financial enabling is a compulsive need to give money to others, even when it’s not in their best interest. Financial dependency is becoming dependent on another person to give you money or manage your finances, which is common among women of older generations.

If you buy the book, you can access a quiz on their website that identifies your likely financial disorders. Mine indicated a potential for hoarding and a potential for financial infidelity, although I felt I was more likely to be an underspender than anything else.

Part 3: Beating Your Money Disorders
In part three, the doctors provide exercises and tools to help you overcome your money disorders and repair your relationship to money. They don’t promise that it’s easy, but they do promise you’ll be better off for it.

Overall Opinion
Overall, I thought this was a great book for anyone suffering from repeated money problems. It’s one thing to fall on hard times once or twice, that happens to many of us, but if it seems to happen again and again, or if shame, fear, or compulsion drive your financial habits, then this is a great start on the road to recovery.

Tax refunds have started rolling in. Although the IRS told us not to expect our until mid-April, they actually sent it already. I quickly transferred that baby to our savings account where it will earn a few pennies until we start buying furniture.

This year’s refund is expected to average $3036. So what should you do with it? Here are a few tips:

Pay Off Debt
If you carry credit card debt, it’s very important that you pay it off. Although credit card issuers are now curtailed from shenanigans, it’s very likely they snuck in several rate hikes before the new rules went into effect. According to, if you took your $3036 tax refund and put it against your credit card debt, you’d avoid $2810 in interest fees 5 years. Meanwhile, it would take you 44 years to save that same amount in a savings account at today’s high of 1.5%.

Upgrade Windows, Doors, and Energy Efficient Appliances
This year there are additional tax credits for weatherizing your home or installing energy efficient appliances, windows, and doors. If you’re in need of a new furnace or new windows, this is the year to put your tax refund to good use, and get a little extra in your next refund as a bonus!

Boost Your Emergency Fund
If you don’t have debt and don’t have any appliances or windows in need of upgrading, just deposit that baby into your emergency fund. I’m sure something will come at some point and you’ll need that money. Trust me, it might not be this year, but it will happen eventually.

Put It Into a Retirement Fund
If you have a 401K match through your employer and aren’t currently getting the full match, increase your retirement withholding to at least meet the match, or the amount of your tax refund, whichever comes first. Since you have the money in the bank, you won’t miss it in your paycheck. If you don’t have a 401K match or a Roth 401K, open an IRA or a Roth IRA with the money. Every little bit helps.

Open a CD Ladder
CD laddering is a way to get higher interest rates on savings, but always having some money close to being liquid. Basically, take $1000 and buy a one-year CD. Take another $1000 and buy a two-year CD. With the last $1000, buy a three-year CD. Spend the remaining $36 on something fun. These days, that’s probably one movie ticket and bucket of popcorn. At some point you’ll want to buy $1000 four and five-year CDs. Then, as each one comes due, roll it into a new five-year CD. So, you’ll have a portfolio of five five-year CDs, but one will always be due within the next 12 years in case you need the money.

Of course, you can also use the money for any pre-planned purchases you’ve been saving up for. In my case, that’s furniture and at some point this year a new car. For other people, it might be a vacation they’ve been squirreling away money for. Whatever you do, make a plan for your tax refund before you spend it. If you just deposit it into your checking account, it will quickly vanish on this and that. That’s now way to treat your money.

It’s that time once again. Time to recognize the effects of light pollution and experience just one hour of darkness. Even though the Earth Hour organizers ask that you turn off the lights at 8:30PM on March 27, 2010,  usually go a step further.

Turn Off All Lights and Electronic Devices for One Hour
We can do this for one hour. It’s really not that hard. Turn off the lights, the TV, the computers, the printers, the DVD player, the game consoles, the cell phones, anything electronic that you can effectively turn off for an hour. Maybe even take the step of flipping off the power strips to block any ghost power consumption. Obviously, I’m not asking you to reach behind the cabinets to unplug the microwave or the timer on the oven – that might be difficult and potentially dangerous. But there’s no harm to be done by switching off for one hour.

What to Do During the Hour
I can think of lots of things to do in the dark. If you’re part of a couple and don’t have kids who are up at that time, do the thing you usually do in the dark. Or, have a romantic candlelight dinner. If you have a family, make it a family game night by candlelight. Throw a party to celebrate the occasion and turn off the lights at 8:30.

Surely at some point you’ve suffered a power outage. My family had them regularly when I was growing up due to a problem with our street’s power pole. We survived just fine for the hours, and once nearly 24 hours, without power. This is no different, except you’re doing it voluntarily.

Just in case you’re tempted to leave the lights or power on so you can see what other people are doing on the news, here’s a video of last year’s festivities so you don’t have to.

Today, the Federal Reserve announced long-awaited new rules governing gift cards. For some of you, your state laws already provided these protections, but now they will be extended to all consumers as of August 22, 2010. The new rules also apply to network cards (bank-issued cards), which many state laws do not. If you’ve got gift cards in your wallet, here’s what you need to know.

Gift Card Expiration Dates Extended
In some states, gift cards expired a little as a year after being issued. The new rules require that gift cards be valid for five years from the date of issue OR the last date the card was loaded with funds, whichever is later. So, if you filled up a coffee card and then forgot about it, you may still be able to use it a few years later.

Inactivity Fees Curtailed
Currently some states bar inactivity fees on gift cards and other states don’t. Under the new rules, inactivity fees can’t start accruing for 12 months after the card has been inactive. In addition, only one fee per month can be charged. The fees can’t be charged unless the card holder has been given clear and conspicuous notification. In most cases, this will be disclosures on the gift cards themselves. Unfortunately, the Fed didn’t limit the amount of the fees that can be charged.

Some Cards Already in Compliance
Perhaps trying to avoid new regulations or sensing they were coming anyway, some retailers and network card issuers have already moved to eliminate inactivity fees and extend expiration dates. If you’re buying a card after August 22, be sure to ask when inactivity fees start to accrue and what amount is charged.

Use Up Gift Cards Quickly
As always, your best course of action is to use gift cards as soon as you receive them. If you receive a non-store card, use it for groceries or something similar as soon as you receive it. If you’re saving up for a major purchase, you can then simply take those funds from your grocery budget and put them in your savings for later.

I ran into a problem using the small balance left on an Amex gift card I received – when the cashier swiped it, the system didn’t reply with the balance due and instead rejected the transaction because it exceeded the balance. I had to tell the checker the exact balance so she could charge exactly that amount to the card. If you have a balance left on a network card, write the exact amount on the card and stick it to the front of the card on a post-it. If you have a balance left on a store gift card, the store’s register should be able to read the balance correctly, but it’s still nice to know what’s left on the card so you don’t spend more than you need to.

So this weekend I became the proud owner of a new pair of garden pruners. My old pruners were purchased in August of 2009. I believe I bought the cheapest pair they had. And that’s why they only lasted eight months. Of course, it didn’t help that my husband left them outside in the rain, but the rust wasn’t actually the problem. My new pair was only $10 (on sale, I think. You can’t always tell at Home Depot), but already I can tell they are vastly superior to my original pruners. I already knew this, but this little adventure reinforced the notion that it pays to invest in good garden tools.

Why It Pays to Invest in Quality Garden Tools
The blades of my pruners were slightly dulled by rust, but they still cut. The reason they broke was the spring. The pruners had a flimsy spring between the handles. After one afternoon of heavy cutting, it fell off. I reattached it a couple times, but I quickly realized this would get frustrating. When I went to Home Depot, I looked for a sturdy pair that didn’t have a visible spring. The new pruners are titanium. I don’t really know if that means they’ll lost longer, but titanium is a pretty strong metal.

When I was at Home Depot about three months ago, I grabbed a pair of gardening gloves that were only $1. They lasted precisely one day and made my hands pruney. So, this weekend I was at Costco and spotted a five-pack of gloves in different styles and materials for $17. Now I can test them all and see which I like best. I’ve already tried two of the pairs and they did a great job. Sure, they cost more, but if a $1 pair only last 1 day, I’d quickly spend far more buying replacing gloves every weekend.

Keep All Your Tools Together
This will be my next project: organizing my tools. Right now my shed is a mess and half-full of empty moving boxes. I also didn’t bring all the new tools and supplies I bought directly outside when I returned from the store. Instead, I spent a lot of time running back into the house every time I needed another tool. Not a very effective use of my time, let me tell you. I also mounted a new sprinkler box this weekend, and that required three different trips into the house to get the necessary tools because I didn’t inspect it when I read the directions.

Once I get the shed cleaned out and organized, finding my tools will be quick work. Now I just need something to carry them down from the shed when it’s time to garden. I think one of the many baskets I’ve accumulated will be just the thing. Best of all – it will be free.

Accumulate Slowly
Since we bought a foreclosure with a dying yard, we took our 20% Lowe’s coupon on a shopping spree soon after we moved in. We spent a lot of money, but also bought a whole lot of tools that we actually needed right then. That trip involved several calls to my dad for input. We bought pruners, loppers, an extendable trimmer, and a few other garden essentials. As time has gone on and we’ve started to work in the garden (as opposed to clearing it), we’ve slowly built up our tool collection to include new items, like a hose and gloves. Now I’m thinking I need a wheelbarrow. I expect to buy a compost bin this month.

I’m glad we took our time to figure out what we really needed, because we could have spent a fortune on stuff we thought we’d need. For example, we never got around to buying a lawn mower. The lawn was mostly dead and then it was dormant. Just when it was time to buy one, we hired a gardener instead. No need to buy a mower now!

Some online banks let you create what they call sub accounts in your master savings account. Essentially, these allow you to make one deposit and then divide the money between several uses for easier tracking. If your online bank allows this, then simply label the subaccounts things like vacation, property tax, homeowner’s insurance, etc. Figure out how much you need to contribute to each account, then make one deposit and divide it.

Other online banks don’t allow subaccounts, but you can still allocate your money in your personal tracking.

Create a SubAccount Tracking Document in Excel
I use Excel to track our annual or semiannual bills, how much we’re allocating each month, and how much we have in the account total. If we’re able to pay a bill out of our checking without dipping into the subaccount, I just start that cell over at one month’s balance, or zero if I simply reduced that month’s savings deposit accordingly.

subaccounts starter tracking

Here’s a sample account. You can see that I’ve labeled the months in the columns, and put the accounts in the rows. I also noted the current balance of the subaccounts after the month’s deposit is made and the available balance, which is the difference between the starting balance plus deposit, and the withdrawals and earmarked funds. At the bottom, I list the monthly contributions to each account and the month’s the bills are due.

How to Track SubAccounts
Here are step-by-step instructions for updating the sheet once a month.

subaccounts in action

1. After the interest is applied and you’ve made your monthly deposit, log into the account. You’ll see the starting balance and the interest. Add these two together and enter that number as the starting balance for the month.

2. Enter the amount of your deposit.

3. If you made any withdrawals (or expect to), either for bills that were due from subaccounts, or for items that weren’t in the subaccounts, note it in the withdrawal column.

4. Add this months’ contribution to last month’s balance for each subaccount. This is your new balance.

5. If you paid any of the annual bills this month, subtract the bill amount from the subaccount balance. If you were able to pay it without using the subaccount funds, simply add that money to your available balance. If you paid it from subaccount funds, subtract that amount from the subaccount balance and note it in the withdrawals column.

6. If you still made the full deposit, divide it accordingly among the accounts. If you reduced your deposit by this month’s contribution for the bill you paid, don’t add money to that account’s balance.

7. Repeat next month.

Here are April and May in action. Let’s say I had to pay the earthquake insurance in April. I noted the amount ($1150) in the withdrawals. However, I made the month’s full deposit, so I allocated a portion of that to the earthquake insurance subaccount ($115). Then in May, I made all the deposits as usual.

Once you get the hang of it, it’s a matter of minutes to update the sheet. Then you’ll never have to worry about using earmarked funds if an emergency comes up.

This year, as has happened before, some states are announcing that their tax refunds will be delayed due to budget woes. If you filed a Federal return and applied for the First Time Homebuyer Credit, you’re also in for a delay of two months or more. We filed in mid-February and the IRS says to expect our refund in mid-April.  In years past, many families budgeted around tax refunds. They planned to buy cars, pay for home repairs, or pay for a vacation with the money. That’s fine. However, if you’re counting on your refund to make a mortgage payment or pay a bill before it’s late, you should start looking for other ways to make the payment. While most people receive refunds in a few days or weeks, most states aren’t required to pay refunds until June or even July.

Change Withholding to Budget for Big Expenses
If you usually use your refund to pay for some last-minute budget item, like property taxes, consider changing your withholding so that you don’t receive a refund. Instead you’ll get the money in every paycheck. Set aside the amount you need each month to get you to the full payment when it’s due. That way you’ll avoid potential penalties if your tax refund doesn’t come on time.

Don’t Count on a Refund to Pay a Mortgage
I was stunned to see some homebuyers complaining that they wouldn’t be able to pay the mortgage if they didn’t get their refund immediately. If you can’t afford the mortgage payments without the homebuyer tax credit, you can’t afford the house. What will you do two months from now when the credit is gone? Don’t buy something you can’t afford and expect to pay for it with your refund. If it’s something you need, like a new car, wait until you have the money in your checking account to go shopping.

Call the Lender Now If Your Refund Will Be Late
If you know you can’t make a payment without your refund, call the lender now, before your payment is late, to work out a new payment plan.  This probably won’t work for mortgages, but credit card issuers and some other lenders can be more flexible if they know why the payment will be held up.

Schedule Vacations and Other Purchases Later in the Year
If you’re counting on a tax refund to pay for a vacation or a big purchase, don’t schedule it for April. Schedule it for July, by which time you should have the money so you can pay for it without incurring debt. And again, change your withholding so that next year you have the flexibility to travel whenever you want, without waiting for the tax man to pay up.

Remember, a tax refund is not free money (unless you get back more than you owe due to low-income credits). It’s YOUR money that you lent to the government interest-free.  There’s no reason to keep giving them loans. I assure you, they would not do the same for you.

Today is the last day to enter the TurboTax giveaway. All comments on the TurboTax review must be received by 6PM PST today.

So far we only have one entrant, so your odds are good!

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