Author Archive

Got insurance? Open the mail.

September 15, 2014

Did you select a health care plan through the Federal Marketplace? Opening your mail can save you money. Centers for Medicare and Medicaid Services (CMS) is working to resolve data matches issues before the next open enrollment period starts on November 15th.

When a consumer enrolls in a Qualified Healthcare Plan (QHP) on the Federal Marketplace, it uses the information the consumer provides to check eligibility for various types of financial assistance. The cost of the healthcare plan may be reduced through advance premium tax credits that lower the monthly premium payment and lower co-pays and deductibles that reduce out-of-pocket costs when visiting the doctor. These features make healthcare insurance more affordable.

For some consumers, the Federal Marketplace was not able to use automated processes during open enrollment to verify their income or citizenship status. To date, CMS has verified the information of nearly 1 million people. CMS is reaching out to the 115,000 people who have not yet responded to numerous requests for information. These 115,000 will lose their Federal Marketplace coverage on September 30, 2014. Check your mail. If you have a letter from CMS, open it and find out what you need to do stay covered.

For more information, visit
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Good health is important and healthcare coverage is key for a healthy life. Take Action – Be Insured.


Using “Auto-Pilot” to Start Budgeting

February 3, 2012

By Carolyn Bird with Molly Herndon

At the end of last year, a freelance reporter contacted me with a request to provide “steps that disorganized, messy, resolution-proof people can take to shore up and improve their financial situations.” In the reporter’s language, the information “is for people who are unlikely to make — much less keep a real budget.’

Here are some effective strategies to help your clients manage and improve their financial situation in the New Year. By investing a little time to put some systems in place, a person can save time and money throughout the year.

First, check to see how much money is coming in and how often. A good place to start is with “take home” pay. This is the amount that your client or her employer deposits into the client’s bank account.

Second, sort the bills into those that have the same amount due every month and those for which the amounts vary. The payments that do not change are called “fixed expenses” and include bills such as rent or mortgage payments. Some utilities may fall into this category as well, such as: cable television, Internet provider service, cell phone contract amount (if you stay within your plan). Even the electric and other utilities can be a fixed dollar amount each month if the provider offers a “budget plan” that averages annual usage over 12 months. Suggest that your clients check with their gas and/or electric service provider to see if a budget plan is available.

Third, if your client is paid more than once per month, decide which bills will be paid during each income period. Clients may need to allocate half of the amount from two pay periods during the month to pay the larger bills such as rent or mortgage.

Fourth, encourage clients to use the electronic bill pay service offered at their financial institution. Using the information on the company’s invoice or bill, clients can set up payment for each of the fixed payment bills. The key is to be sure to select a payment date so the payment will arrive on time. One final check after setting up accounts for payment is to remember to verify that each bill is accounted for in its income period. This will help avoid overspending for an income period.

Fifth, clients can use a calendar and mark “online dates” for paying bills. These dates will likely be close to the client’s payday. For example, if your client will be paid on February 1st, then February 1st or 2nd might be good days for an online date. On the selected date, your client can log into his account and approve the bills for payment. It is possible to set payments for automatic processing on a certain date, but I suggest that those new to budgeting use the manual processing procedure. Manual processing provides one more opportunity to double-check the numbers, and if there is an error, to avoid over-spending. Using this method will reduce the time needed to manage monthly finances and it will help the client avoid fees from late payments or bounced checks. For example, if your client carries a credit card balance, setting up an automatic payment for at least the minimum amount due will avoid late fees. Additional payments can always be made in the same or a different pay period.

If the due dates are too close to pay dates to allow the payments to arrive on-time, your client can contact each company and ask for a later due date. Be aware that it may take one or two billing cycles for the due date change to take place. Another technique to avoid account overdraft is to establish an account dedicated to bill payments. This is particularly useful for clients who don’t keep a running balance for the checking or transaction account. A separate bill-payment account can reduce bill-paying stress. Each pay period, the necessary amount of money to cover the bills or the amount of money to be allocated against a bill (like rent or mortgage) is transferred to the bill-payment account. This way, a forgotten ATM transaction will not jeopardize the ability to pay bills. A dedicated bill-payment account can be an effective way for dual income couples to contribute to and manage household bill payments.

Now that your client has identified how much income is devoted to fixed payments, the balance can be allocated across variable expenses.

Other tips for managing money on the go:

  • Set up an alert for notification when a deposit is made to an account.
  • Set up an automatic transfer from checking to savings; start with what you can afford and increase it overtime. This can be $5 or $10.
  • Set up an alert for when the account balance falls to a certain amount, it might $100, $50 or whatever number is meaningful for your client. What the alert means will be individual to your client. But in any case it is a signal to seriously consider each financial transaction.  How your client responds will vary from curtailing eating out, skipping an outing with friends, or resisting a clothing purchase. The important thing is for your client to decide what will help him to live within his income and to tailor the alert accordingly.

Lastly, these strategies are great steps toward establishing a budget. The budget is a tool that helps identify where the money goes each month. It offers an opportunity to decide if your money is really being spent the way you would like. The budget works for your client to help him meet financial goals. It may be useful to provide your client with a spending tracking tool, like this one .

A budget can also remind us that while a cost is fixed in the short run, it is variable in the long run. This means that if a utility expense (such as cell phone, cable, Internet, etc.) is too high, it may not be possible to reduce the rate right now but your client can shop for a better rate when the contract nears renewal. Or your client may decide to do away with a service for a while. Similarly, your client can look for a more reasonable place to live or one that is closer to work to reduce the cost of housing or transportation. By highlighting spending choices that may not be working so well, a budget can be used as a comparative tool when considering spending alternatives.

This blog focuses on the national core competency of “spending.” The competency behaviors discussed included: tracking spending and living within your means.

Are your clients or program participants using automatic banking features to help them better manage their finances? What tips and techniques are they using?

Lenders may have to tell you your credit score

March 21, 2011

The Federal Reserve Board and the Federal Trade Commission proposed new rules to help consumers better understand the credit decision a lender made that resulted in a less favorable outcome.

The proposed rules require lenders to tell consumers the credit score that was used in a lending decision that resulted in an adverse lending decision.   The proposed disclosure also identifies from which reporting agency the score was obtained.   The proposal includes model notices that clearly identify the score used and explains what a credit score is and how it might change over time.

Should lenders should have to give a person their credit score for free when its use resulted in an adverse lending decision?