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Employee Benefit Health Care Costs Are Out of Control

Written by adminAugust 20, 2019

It’s no secret that most Americans continue to struggle with rising healthcare costs. It’s not just the lower-class or those who have to pay for their own insurance, but also many with employer health care. As the healthcare costs keep rising, the more they’re expected to pay out-of-pocket and in co-pays.

The Commonwealth Fund (or TCF), has stated: “employer plan premium contributions and out-of-pocket costs, like those for prescription drugs, are eating up an increasing portion of household budgets.” This was discovered in a survey that found around 23.6 million people with employer coverage were paying higher premiums, higher out-of-pocket costs, or even both.

“It’s very arresting to me just to think about 24 million people with employer coverage who are living in households that spend a large share of their income on health care costs,” Sara Collins, vice president at the Commonwealth Fund. “When just thinking about … those human beings, that’s pretty striking … Some households spend almost nothing and some are spending thousands of dollars per year.”

The TCF Report

The TCF report gave a definition of what they considered a higher premium contribution.

They said, “if the total annual amount they pay for their employer plan premiums equals 10% of more of annual household income. Americans were considered to be paying high out-of-pocket costs if the total annual amount they pay out of pocket for medical expenditures not covered by their employer plan … is 10% or more of annual household income, or 5% or more for families earning less than 200% of the federal poverty level.”

This report unequivocally proves that people with employer health plans don’t necessarily have lower healthcare costs. This is a major shift that’s been happening over the past decade. Everything is getting more expensive. That includes health care costs and is burdening so many American families.

“What we’ve seen over the last few years is a steady growth in the percentage of people who are insured all year but have high out-of-pocket costs relative to their income and deductibles” to the point that “they’re considered underinsured,” Collins said. “The biggest growth in that trend is occurring among people who have employer plans.”

Growing Health Care Costs

The TCF report found that nearly 100% of the increasing out-of-pocket costs and premiums are driven specifically by the increase of healthcare costs. It’s dramatically outpacing people’s incomes which don’t seem to be moving upward fairly quickly.

“What’s really important for people to understand is that the principal driver of premium growth [and] the principal driver of out-of-pocket costs is the overall rate of growth in health care costs in the economy,’ Collins said.

U.S. healthcare costs grew 3.9% in 2017 and continues to grow.

Written by adminAugust 20, 2019

Insurance

The goal of most people is to one day own a home and fill it with all their favorite heirlooms and possessions. But what do you do when you’re someone who rents? There are millions of Americans out there who rent either an apartment or a home. This place doesn’t belong to them, they are still responsible for their stuff.

According to the Nationwide Mutual Insurance Company, the two biggest fears that renters have are theft and fire. They conducted a survey of over 1000 renters and this is what they found. 24% of those surveyed said that they would grab their laptop is the first object out the door, even over any family heirlooms.

The surprising fact about the survey is that it revealed that 56% of them said that they had no renter’s insurance. Of course, you’re going to be worried about theft or a fire if you have no insurance to help cover the claims. But there are several myths that are being perpetuated out there about what is actually covered or not in the event that something bad happens.

Let’s take a look at five of those myths:

1) You’re Covered by the Landlord

You might think that you and your possessions will be covered by the landlord. Most likely, the landlord does have insurance, but that insurance will only cover damage to their building or property. It will not cover damage or loss of your property. In the event of a fire, the landlord would be able to make repairs to the building through his insurance policy. His policy doesn’t cover any of your stuff.

You would be responsible for replacing all of your furniture and possessions. You would also probably have to find a new place to live until the repairs are completed. By having renter’s insurance, your possessions would be covered and you might have a policy that allows temporary lodging while repairs are being made.

2) It’s Too Expensive

One of the main reasons why people don’t get renters insurance is that they believe it’s too expensive. But that only means that they’ve never really looked into it or that they compare it to car insurance which is often hundreds of dollars. The average cost of renter’s insurance is $20 a month. It’s not very expensive at all and many insurance companies will offer a discount.

3) Accidents Aren’t Covered

Would say your friends get together and have a little bit of a party. Would your renter’s insurance cover any damage? What about other accidents or injuries? The amount of coverage you receive will be different compared to the package you choose and what you pay. You may be surprised about what’s covered.

4) Renter’s Insurance Doesn’t Cover Theft

This is a myth that’s simply untrue. You’re not just covered for theft, but also for any damage that occurs to your property during the process of the theft.

5) You’re Not Covered for Natural Disasters

A natural disaster that damages the building would be covered by the landlord’s insurance. But your stuff is still covered, depending on the type of plan you get. Things like floods and earthquakes are only available in areas that are more prone to getting hit by those things. In most instances, it’s storm damage, lightning, fire, wind, and hail.

Written by adminAugust 20, 2019

Saving

As we begin to close out August, schools all over the country are starting to ring student back into their halls. If you have a kid, then you know how important it is to them to look good and have all their bases covered, from nice outfits to brand new shoes. For parents, it can be expensive and will often leave us shaking our heads at the price tag.

How can we survive back-to-school clothes shopping? Look at these 5 ways to do it successfully:

1) Put Together a Plan

Don’t just walk into a store with wild abandon. It can be a waste of time if you don’t know where all the sales are. It can pay to do your homework and look for the best deals. Ask other parents where they shop and how the prices are. You should also get your kids involved with the process. Give them a budget and have them start sharing ideas of purchases they want to make. That way you can head off any disappointment and be prepared to spend only what you budget.

2) Go Through Their Closet

We get it. Your kid wants a fully fresh and new wardrobe. They’re going to have to live with the disappointment that it’s just not in the budget. So, as you go over their budget with them and the options that they have, it’s not a bad idea to go through their closet and see what they have. There’s no shame in wearing an outfit that they wore last year if it still fits.

3) Do Online Shopping

Another option for shopping is to not waste your time browsing through aisle after aisle with your kids. This is especially true if you’re a mom with teenage boys, or a dad with teenage girls. Again, it’s better to give your kids a budget and let the browse online for what they want. Then you can keep track of their actual purchases (or they can send you a link and you do the purchase for them). It’s easier, less stressful, and cheaper to do it this way.

4) Take Them Shopping Individually

To remove the chaos and stress of back-to-school shopping, especially if you have multiple kids to shop for, it might be best to take them out one at a time. This is a good idea because they all have different needs and wants. It will give you the time to focus on each child individually rather than a collective whirlwind through the store.

5) Don’t Wait Until Back-to-School Season

There’s Amazon Prime Day and other opportunities to buy school supplies and clothing out of season. When it’s back-to-school time, there’s no doubt the prices go up for these items. Shop throughout the summer and don’t wait until the few weeks before they start back up again.

Written by adminAugust 13, 2019

Business

It would seem as if we’re quickly reaching the end of another era. There are plenty of pizza delivery chains like Dominos and Papa Johns. Pizza Hut does well with delivery themselves, but one thing they had that separated them from everyone else was the sit-down format. Bring your family to Pizza Hut and sit down together and enjoy the meal.

But it seems as if things are rapidly changing. Pizza Hut now says that they plan to close hundreds of their dine-in restaurants to focus mainly on delivery. They want to provide a faster product to keep up with the demand. Less people are sitting down to eat, so the change is needed to save the company money.

Other establishments are also changing themselves to be more convenience oriented. We’re getting busier, so quick pizzas out the door are undoubtedly going to sell more. By moving away from the restaurant model, they hope to drive more sales, according to Yum! Brands CEO Greg Creed. Yum! Brands owns Pizza Hut among many other restaurants and fast food places.

“We plan to lean in to accelerate the transition of our Pizza Hut U.S. estate to a more modern delivery- and carryout-focused asset base,” he said. “This will ultimately position the Pizza Hut brand for many years of faster growth in the U.S. We view this as a positive move for the brand,” he said.

Cost Cutting

Pizza Hut plans to cut around 500 restaurants across the country. It’s only a small number of the 7,496 stores they have, but most aren’t sit-in restaurants. This is a way for them to cut costs and staying relevant in a time when pizza delivery is trying to reinvent itself. There’s no doubt that pizza, while always popular, has been seeing slumping sales as of late.

With new apps like Grubhub and Doordash, you can order from just about any restaurant in your community. That means you no longer have to go and sit down in a restaurant to enjoy their food. This is a convenience that might do to dining restaurants was Netflix did to Blockbuster. You offer a new convenience and people move forward with what’s the easiest.

Just like Dominos did a few years ago, Pizza Hut has released a new recipe for their famous Original Pan Pizza. They’re also trying out new pick-up options much like Little Caesars is doing today. You can order online and pick up your hot-n-ready at your leisure or on the way home from work. It’s pizza made easy.

Written by adminAugust 13, 2019

Credit & Debt

Americans have a personal debt problem. Together we owe more than $13 trillion to our creditors. This is according to data collected by the Federal Reserve Bank of New York. It’s so bad that millions of Americans are struggling to figure out how to get out of their debt. Once they get into it, it seems like a revolving cycle of bad news and collection calls that never seem to stop. It’s really putting a burden on most of us.

Every single state in the country is incredibly stressed out about their debt. It touches most lives as we need to take out a certain amount of debt to do much of anything. You want to buy a house, a car, go to college, or many other things, we need to take out a loan. Most of us cannot afford these things on our own.

If you’re really struggling under a mountain of debt, it’s going to take a lot of work to get to the point where you’re financially free. Let’s take a look at five different ways to which you can help get yourself out of debt.

1) Write It All Down

You may be shocked to learn that most Americans would that do not know the total amount that they owe. You would think that this would be the first step for a lot of people. Yet, they just keep taking out more and more debt without really understanding how it works. They don’t even care about the impact that taking out all this additional debt or the havoc is causing in their lives. This is why you should go through all of your accounts and write down every single cent so that you can lay it out before you and look at what you all. This is the first step in taking care of the problem.

2) Pay Off the Smaller Debts First

If you’re able to do it, pay off your smaller debts first. Paying off some your smaller debts will increase your credit score and show a record of your ability to pay off your debt. Once you have some of the smaller debts out from underneath you, you can then put more money towards the bigger debts to get those paid off quicker.

3) Consider Your Spending Habits

One area that is necessary for you to look at is how you got into debt in the first place. Learn from your mistakes and grow out of them. If you just keep on taking more and more debt without learning how you got in debt in the first place, is not going to bode well for you. You need to stop the hemorrhaging of money. The more debt you take out, the worse your credit score gets and the more interest that you have to pay on that debt. Find out how you got there and stop it. You and your family’s livelihoods depend on it.

4) Don’t Take Out New Debt to Pay for Old Debt

Once one account gets so large that you can’t pay it back, some people will take out more debt to pay it off. But then are stuck with an even larger debt and paying off even higher interest fees. If you can’t pay off this first step, how are you going to pay off the second that? The goal is to get rid of debt, not take on more debt.

5) Declare Bankruptcy

Declaring bankruptcy should be a final solution. If there’s no other alternatives for you, then this might help you get rid of your debt and get a fresh start. You will have to restart building your credit all over again and it can take several years. If you have student loan debt, you cannot simply wipe away with bankruptcy so there are certain debts that you will have to continue to pay no matter what.

Written by adminAugust 13, 2019

Loans

One of the biggest struggles Americans have is paying back their debt. Even while the economy is soaring, and unemployment is at record lows, debt continues to pile up. It seems as if we find more reasons to keep getting more debt and less reasons to actually pay back. Yet, the good times never last and there will be a time when most Americans regret of the debt they’ve accumulated.

Collectively, Americans all around $13.2 trillion in personal debt. This combines all types of debt including credit card debt, mortgage debt, student loans, auto loans, and personal loans. Were always eager to buy the next big thing, but we scarcely consider the impact paying and trust will have down the road. Especially if the economy slows down or work dries up.

The worst thing about debt is the stress that puts on so many people. Student loan debt alone is forcing young Americans to put off making major life decisions. New studies have revealed that millennials are waiting longer to get married, by home, or start a business. They’re waiting longer than any other previous generation.

Having a lot of debt causes a lot of major problems. They can be difficult to keep up with the payments. When that happens, usually debt collectors come calling in a have many tricks and tactics to use to get you to pay up. Not to mention how much unpaid debt can destroy your credit score and make life even more difficult for you.

Let’s look at several ways removing debt from your life can ease your stress:

1) No More Debt Collectors Calling

Nothing can strike more fear in a person that a call from a debt collector. As stated previously, they have many tricks and tools up their sleeves to help entice you to pay up. They don’t care about what you’re going through or any situation you might be in. The truth is, they’ll continue bugging you until you do pay them what you owe.

This can be very stressful, but the only way to get them off your back is by being current. Once the debt is paid off, it is officially yours! You won’t have to worry any longer about whether you will lose what you’ve been working hard to pay off. Pay off your debts as soon as you can and life will get easier. Remember the feeling of being hounded and make better decisions.

2) You’ll Have More Money

There’s already so much we have to pay for. Most Americans can’t even afford to pay for their healthcare or insurance. You never know when your car insurance is going to go up, you might need a little emergency money. When it be good to finally have a little extra disposable income? When you pay off certain debts, you finally own what you are paying off. That means no more money is escaping out of your purse or wallet. You can finally see or have a little extra spending money if you’re spending is already covered.

3) You Will Finally Repair Your Credit Score

Repairing your credit score takes time. It may be really low right now, but have to stay that way. Don’t let it get worse by acquiring more and more debt. And as you begin to pay off your debt and the total amount you owed starts going down, that’s when your credit score starts to inch back up. When you finally pay off the debt in full, you’ll be seen in a better light in the event you need to take out credit again.

4) You Can Finally Plan for the Future

Here’s a difficult fact: most Americans are ill-prepared for retirement. We spoke previously about how debt is forcing people to put off making major decisions. One of those major decisions is the ability to afford saving for retirement. Having more money provides you with many more options. The more you save, the more you can plan a good vacation, for retirement, or even decide to start a business. Maybe you want to invest in the stock market. Whatever it is you want to do, the list that you have, the better off you’ll be.

Written by adminAugust 13, 2019

Real life

In a move that has stunned just about everybody who heard about it, Chase bank is decided to forgive all credit card debt owed by their Canadian customers. This is surely a massive sigh of relief to those with outstanding debt. Chase bank is part of the J.P. Morgan New York based system and decided a few months ago that they would close all credit card accounts in the country.

While they closed all credit card accounts, everyone was still obligated to pay their debt. That was until yesterday when Chase finally told everyone that they had been forgiven of their debt. Many are wondering how this happened or why, but it makes financial sense for Chase. Since they are closing all accounts anyways, the most likely felt that it was more expensive to continue hiring people to chase down those who still owe credit card payments.

“I was sort of over the moon all last night, with a smile on my face,” Douglas Turner of Coe Hill, Ontario, told the Canadian broadcaster. Turner said he still owed more than $4,500 on his card. “I couldn’t believe it.”

“It’s crazy,” Turner added. “This stuff doesn’t happen with credit cards. Credit cards are horror stories.” The 55-year-old trucker also told CBC that his most recent payment on the account would also be reimbursed.

Taking Care of Customers

Again, rather than hiring a third-party to chase down the debt, Chase bank pulled a stunning PR move that will undoubtedly bring in more fans of their brand. They felt it was easier for all parties involved to just forgive the debt. Chase bank brought two different types of reward credit cards into Canada. What was Amazon and the other was Marriott hotels, offering rewards based upon usage.

Vice-President of Communications of Chase said in a statement to Reuters that forgiving the debt was a good move because it “was a better decision for all parties, including and most importantly our customers.” It looks to have been the right decision.

“I’m honestly still so … flabbergasted about it,” he said. “It’s surprise fees, extra complications – things like that, definitely, but not loan forgiveness.

A 24-year-old university student, she said: “It’s kind of like I’m being rewarded for my irresponsibility.” All there were many who are irresponsible with their credit card debt, this gives many Canadians a fresh start towards a better future. With credit card debt piling up past the trillion-dollar mark, many Americans can only hope that one day some of their debt will be forgiven so that they too can have a fresh start.

Written by adminAugust 12, 2019

Student Loan Consolidation

Currently in the United States, 44 million Americans owe $1.56 trillion worth of student loan debt. This is a number that is set to continually rise and hit the $2 trillion mark in the next few years. Everyone knows that were at a crisis level with student debt, yet colleges don’t care. They continue raising tuition through the roof and is forcing many young millennials to think twice about going to college.

TD Ameritrade worked with The Harris Poll to take a look at the impact of the student loan crisis and how it was affecting students today. This amount of debt is doubled only in the last decade. This is the first time we’ve really seen this change to where debt is accumulating more rapidly than it ever has before. In a short amount of time.

The pull over 3000 students from the youngest two generations, Gen Z who is entering college for the first time, and younger millennials who are nearing graduation. The study was called the 2019 Young Americans & College Survey. Looked at finding out whether there’s been a major attitude shift towards going to college. Of course, the answer is yes, there’s been a massive shift.

We used to believe that when she graduated high school you went on to college. Going to college was necessary and it was expected that you do so. Not going to college equated to making much less money and being one of the poorest Americans living paycheck to paycheck. There was no understating the value of a college education.

The Massive Shift

As the Great Recession hit the economy over the past decade, many millions of Americans found themselves without work. They thought would many people do when they graduate high school. They’re desperate to find work and felt that the only good, quality work out there required degrees. The problem is, colleges knew that people were desperate to make more money.

Many schools have been caught lying and making promises about job placement rates. They pushed ads into the American mainstream and it enticed millions of people to go back to school. When it was found that of the schools lied about their job placement rates to get more people in the door, that this meant that there are more people with outstanding student loan debt and no job to pay for it.

While this is happening, colleges are raking in billions and billions of dollars. They keep dramatically increasing the cost of tuition while siphoning off money from the government. It’s almost as if the entire education system decided to become crooked and value profit over anything else. The youngest generations are seeing this happen and are deciding not to stand for it.

Putting Off College

While college is still seen as a must after high school by most, it seems as if the shift is starting to take place. 25% of young students are deciding to put off going to college according to the survey. The main reason why this is happening? Cost. 1-in-5 don’t believe they’ll ever go to college. It’s not worth the investment for them.

Going to college is almost the equivalent of financing a brand-new car. You find yourself tens of thousands of dollars in debt and making payments, including paying attentional interest, for the next 10 to 20 years of their lives. This type of arrangement is hurting millions of lives, as many young adults are putting off making major life decisions, like getting married and having a baby. They simply cannot afford to do anything but live as cheaply as possible while paying off their student debt.

“There are some students who are saying a four-year traditional degree may not be for me,” Dara Luber, TD Ameritrade’s Senior Manager of Retirement, told Yahoo Finance’s YFI AM on Tuesday. “There’s always going to be a need for those who go to trade schools. So, there could be a shift in how you’re approaching life after high school.”

This study found that 20% of all young millennial’s out there have over $50,000 worth of student loan debt. The students are also expected to be paying off this debt well past the age of 50. That shows that there are less people able to pay their debt and more were going into default.

“More students are seeing the need to not only go to college, but I think part of the increase in the debt is also the need or the feeling that you need to go on to go to grad school to achieve the right job,” Luber said.

“They [parents] understand what it is to have to pay back those loans, and how much it could impact not only for themselves, but for their students, future retirement savings, being able to buy their first home, get married, and have children. All those downstream impacts of having to pay back their student loans when they get out of college,” Luber said.

Written by adminAugust 12, 2019

Student Loan Consolidation

With the 2020 presidential race seemingly fully underway, the Democrat party has plenty of candidate is looking to become the nominee who face off against Pres. Trump. One of the biggest issues in this race is become student loan debt. It’s a problem that faces close to 45 million people, most of whom are desperately struggling to pay off their debt.

In a bid no doubt designed to win votes, nearly every Democrat running has some plan for canceling student loan debt and/or making college for everyone. Studies are being conducted that show that many young people are suffering and the burden of student loan debt. It’s forcing them to put off making major life decisions, like buying a home or getting married.

These decisions impact the economy more and more. It’s almost as if the student loan debt problem is a growing bubble. Considering this problem impacts more than just the person who took out the loan, but also their family and friends who are rallying to help the individual to get on their feet. Let’s take a look at several of the presidential candidates have to say about this problem.

Senator Elizabeth Warren

Sen. Warren wants to cancel up to $50,000 in student loan debt for people who have a modest income. She doesn’t want to completely wipe away student loan debt, and she feels that Americans making over $100,000 could easily afford their monthly payments. Really it would be an income-based forgiveness that will determine how much you are able to get taken off what you owe.

She’s also looking to make tuition free public college more of a thing. “Once we’ve cleared out the debt that’s holding down an entire generation of Americans, we must ensure that we never have another student debt crisis again,” Warren wrote in her Medium post, announcing the plan.

Senator Bernie Sanders

Where Sen. Warren is more careful to only offer free college to public schools and wipe away the debt the poorest of Americans, Sen. Sanders has the most comprehensive and complete wiping away of all student loan debt. His goal, through the College for All Act, would make going to college completely debt and tuition free for all Americans.

He also wants to continue giving Pell Grants to low income individuals so when they go to school, it will cover the non-tuition aspects of college, like room and board. He hopes to raise taxes on stock transitions to raise the nearly $2 trillion it will cost to both wipe out debt and provide free education for all.

Senator Kamala Harris

Sen. Harris’s plans aren’t as grand as the previous two, but if you are a Pell grant recipient, indicating low income status, that she wants to cancel is much as $20,000 in student debt. He also wants to offer a better student loan forgiveness program to historically black colleges and invest more in them.

“Yesterday I announced that, as president, I’ll establish a student loan debt forgiveness program for Pell Grant recipients who start a business that operates for three years in disadvantaged communities. https://kamalaharris.org/opportunity-gap/ …” she tweeted.

Senator Amy Klobuchar

Sen. Klobuchar is one of the more moderates in this area running for president. She been more careful not to talk too much about full student loan forgiveness, but she has supported legislation that makes paying back loans easier and more affordable for students. He’s even gone as far as speaking out against total tuition free schools. Although she does want to expand the Pell grant program which helps lower income individuals afford college.

Representative Tulsi Gabbard

Rep. Gabbard is on the same side as Sen. Bernie Sanders in supporting his College for All Act.

“This is the rate of student loan debt over the last 10+ years. Trump admin has made it worse by rolling back regulations and oversight on the way loans are administered. We need to re-invest in our students and make college attainable for everyone. #CollegeForAll” she tweeted.

Former Vice President Joe Biden

Out of all the candidates running for president, former VP Joe Biden is the one who hasn’t said very much at all about student debt during his campaigning. He is perhaps the most moderate of all the candidates while wiping out student debt and offering free tuition is more of a socialist credo. While he hasn’t stated anything recently, back in 2015 he did say he would support any measure that makes 4-year colleges tuition-free.

Written by adminAugust 9, 2019

Mortgage

Many prospective borrowers are likely to miss out.

Over the past week, mortgage rates plunged in response to concerns related to the ongoing trade war with China as well as overall economic health of the US.

The 30-year fixed-rate mortgage averaged 3.6% during the week, sliding 15% basis points down from last week according to a report collated by Freddie Mac. This is the lowest level mortgage rates have been since the 2016 presidential election, and the third-largest weekly decline this year. So far in 2019, rates have only posted an increase on eight occasions.

The 15-year fixed-rate also dropped 15 basis points to an average of 3.05%. The 5/1 adjustable-rate mortgage also declined 10 basis points to average at 3.36%.

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Despite the Federal Reserve cutting the Fed funds rate last week, that change has already been accounted for and incorporated into the mortgage rates. This week’s decline likely reflected the growing misgivings about the stock markets, including worries about the trade war that continues to rage between the US and China.

Freddie Mac in its report likened it to a “tug of war in the financial markets between weaker business sentiment and consumer sentiment.” As business sentiment is weakened by negative trade and manufacturing news, consumer sentiment is buffeted by a strong labor market and low mortgage rates that will continue to spur home sales all the way through the fall season.

In the end, the declining supply of homes for sale will offset any boost the low mortgage rates would otherwise provide to the housing market.

Prospective buyers will most likely miss out on these once-in-a-generation opportunity of low mortgage rates as home prices continue to reach record highs all across the country. This makes it hard for millenials to take advantage of these savings.

One positive sidenote is that this week’s drop in mortgage rates did result in a major surge in home-loan applications, although most of this was centered around mortgage refinances rather than new home loans.

If you need any financial advice, look no further than the Financial Helpers. We are just one phone call away and ready to assist you.

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