Welcome Lori!

Do you have a written budget? And which of Dave’s books do you have(he has several)? If you don’t have the Total Money Makeover, I’d suggest starting there. He lays out the process of the “Baby Steps” that help you get control of your money, eliminate debt, and become wealthy.

Commission only income

I think I need to go back and reread some of Mark’s info on variable income but I wanted to pose this question to all of you. My job is commission only in an industry where sales are up and down without a lot of continuity. That said, spring is usually the busiest season so I hope to have a windfall soon.

I am currently on baby step 2 with about $12,000 of debt remaining to pay off. Would it be a horrible idea to put my debt payoff on the slow track and put a few months of expenses in savings first? I haven’t been working the system long and to be honest it scares me to death to not have a cushion in case I don’t have a check coming in a couple of months, which does happen. The $1000 emergency fund (guaranteed loans) won’t go far if I don’t have any money coming in at all.

Any of you experience the same sort of income fluctuation and how do you deal with that?

We have Blue Cross health insurance and it is purchased by us, not through work.

We each have a deductible, which I think is $5000/person. We must foot the bill for the first $5K. IOW, each time we go to the doctor, hospital, walk in clinic, to any kind of therapy, we pay till we have reached $5000 for the patient. Each of us, dh and me, has this deductible.

Once the deductible is met Blue Cross pays 70% and we pay 30% till we reach our out of pocket limit, which escapes me right now but I think it’s $2000. This is for each one of us, not combined.

After we reach the out of pocket limit, BC pays 100%.

Medication has its own deductible as of 2-3 years ago. So any prescription purchases goes against the prescription deduction, not the $5000. I think the prescription deductible is $1000.

Each state is different on insurance legalities and policies. Each policy, even within the same company, can be different. Your mileage may vary.

Rarely do we meet the $5000 deductible unless one of us ends up in the hospital due to illness or a procedure. We are fortunate we qualify for a Health Savings account (HSA) due to the high deductible. We fully fund it each year. We do not use it for normal doctor’s visits or normal prescription purchases. We save it for big bills that are more than a couple of $100. It is helpful to have one at tax time because whatever is put into it comes off the top at tax time. Also if you still have some left at the end of the year it can roll over. You are not penalized for leaving some in the account at year’s end.

Speaking of medical bills..

So DH changed jobs and medical insurance (still BX, different flavor) and I just got an “explanation of benefits.”

so basically, they are paying ZERO until we hit the deductible ($3k/person, $6k/family)

I’ve never had an insurance company pay ZERO before. So

1. does this mean i don’t have to shell out co-pays also? I mean, if I’m on the hook for “everything” why should I have to shell out a “co pay” also?

2. does them not paying ANYTHING even sound logical?

just thought i’d ask before I call tomorrow and ask What The Heck?

A strange, but happy victory

Some might not consider the following a victory, but to me it is. Over the holidays, I drove my elderly parents from Chicago to my home in Atlanta for a visit. (Oh, the stories I could tell about THAT!) I was driving a rental car, because my parents’ car was in for a repair. Long story/short. I damaged the rental car. It wasn’t due to a collision. In the dark, in the rain, on a very steep driveway, I damaged the fender/bumper on the driver’s side. Absolutely my fault, but totally cosmetic. No mechanical damage. I felt horrible, but realized a) this is why you have insurance, and b) I had more than $2,500 in my personal Emergency Fund, and $6,000 in my business Emergency Fund. (A portion of my income comes from my home-based business.)

That moment of abject terror when I saw the damage immediately changed to ‘I think I’ve got this! Thank you, Dave!’

After doing some research online I estimated that the damage could be between $500 and $2,000, if my assessment of the damage was correct. I was pretty sure I didn’t need to use my insurance to pay for the damage. Yesterday, I paid for the damage, $569. I shifted the money from my Emergency Fund and paid it promptly. I felt so empowered by this experience. Pre-Financial Peace, my only option would have been to pull those funds from my IRA. I’m happy to report that I haven’t tapped into my IRA since beginning FPU in April 2014.

Another victory in this. Again, perhaps strange, is that though my parents didn’t want me to pay the bill, I did. Even though I owned the mistake I made with the car, my mother wanted to pay for it. It was REALLY important to me to pay this myself. Mind you, I’m 54 years old. It was a bit ridiculous, but I had to trick my mother into giving me gave me all the invoice information. While I had her on the phone, I went online and paid for the damage. (She had written a check and was going to mail it to the car rental company. Internet trumps snail mail!) I announced to her ‘Ma, I just paid it. Cut up your check. I’ll send you a copy of the receipt in email.’

I felt so empowered by this experience, which would have been completely negative just 2 years ago. Not that I’m looking to have more accidents with cars!