The Balance, a personal finance website publisher, recently reported on the alarming rate of medical bankruptcy in the U.S., stating that 643,000 Americans face bankruptcy each year as a result of medical costs. One thing that was shocking about the information gleaned from the many studies conducted on the relationship between high medical bills and bankruptcy is the fact that people who have health insurance are three times more likely than those who do not to file bankruptcy related to healthcare costs. The hypothesis is that the actual protection provided by the health insurance was considerably less than expected once copayments, deductibles, and excluded fees and expenses were added up. Others found their insurance denied claims or excluded specific services, hospitals, or physicians. For all these reasons and more, it is more important in retirement, as you adjust to life under Medicare coverage, to consider supplemental healthcare coverage and protect the nest egg that funds your retirement and avoid overwhelming medical expenses that could cripple your retirement budget. What is Supplemental Health Insurance? Some refer to supplemental health insurance as a type of “gap” insurance. It is designed to plug in holes in your Medicare coverage by filling in the gaps. What this means is that supplemental health insurance helps to pay for the expenses your Medicare insurance doesn’t cover. This includes things like: You might not realize it at first glance, but these expenses can add up quickly, and things like deductibles reset every year. The way supplemental policies for Medicare insurance work is that you pay a monthly fee for the insurance and you get to eliminate the additional debt. Is supplemental health insurance good for everyone? There is no such thing as one-size-fits-all. Every home, family, household, and individual is different. While working and earning a living, a supplemental policy may not be critical. However, that takes on a different relevance once you retire, especially if you are using Medicare. The other thing to realize is that there are different types of supplemental or “Medigap” insurance policies available. AAA reports that there are ten different types of Medigap policies, each one offering different levels of coverage and types of coverage. That can keep things more than a little confusing on the consumer end. It also means you need to think about whether now is an ideal time to invest in supplemental health insurance. Those who are just retiring and do not yet have significant medical expenses may not be ready to invest in additional protection. However, your health status is something that can change on a dime with little notice. Many people feel it is necessary to invest in supplemental insurance for their Medicare coverage from day one. When Should You Consider Supplemental Health Insurance? One key consideration when choosing supplemental health insurance involves whether you are enrolling in Medicare Part B. If that is the case, you should strongly consider signing up for additional Medicare insurance within the first six months of enrollment in Medicare Part B. If you do not purchase supplemental health insurance during this six month grace period, your additional coverage options may be severely limited. Most importantly, failing to do so within the first six months of Medicare Part B coverage eliminates the “guaranteed issue” aspect of supplemental health insurance, meaning you may not be able to enroll at all after the six-month window closes. In other words, the ideal time to purchase supplemental health insurance, if you suspect you will someday need it, is within the first six months of enrolling in your Medicare coverage. Otherwise, you run the risk of being unable to do so at a later date. Key Details about Supplemental Health Insurance With so many bankruptcies every year over mounting medical costs, the average retiree cannot afford to skip out on supplemental health insurance protection. Just make sure you get the coverage most likely to meet your needs today, and as they evolve, best.

Supplemental Healthcare Coverage in Retirement

View Resource Supplemental Healthcare Coverage in Retirement
Almost anytime you book travel online or over the phone, websites or agents will ask whether you would like to purchase travel insurance for your trip. The pitch for travel insurance is usually a hard sell. Companies warn that failure to purchase travel insurance could leave you responsible for cancellation fees and other expenses. The reality is that most people are not sure whether it is necessary or not. They may add it on blindly (or fail to buy it) without fully understanding what it offers or how it might impact their travel plans. It is essential to weigh the pros and cons of purchasing travel insurance for your particular situation since there are many factors to consider and exclusions to take into account. What is Travel Insurance? In a nutshell, travel insurance is designed to protect you, the traveler, from financial losses that could occur during your travel. However, only certain situations and benefits are covered, plan coverage varies, and there are many exclusions. When Should You Take It? One of the prime times to consider travel insurance is when you are traveling out of the country. When traveling abroad, choose a robust travel insurance plan and understand the intricacies of offerings for things like: Even in these situations, you might want to check to see if you have coverage and protection elsewhere, such as through your credit card provider, first. When Should You Skip It? The short answer to this question is “some of the time.” That is the case when traveling domestically on a short trip where the cost of the trip is minimal. Another time to skip the travel insurance is when your credit card company offers protection already. No one wants to pay for the same service twice. More importantly, most credit card companies provide more robust coverage than the average add-on insurance plan when booking flights and hotels. Also, some airlines offer no change fees, which allows you to change your flight without incurring a cost to do so. If you book your trip through an airline offering this perk, then considering skipping travel insurance for this portion of your itinerary. Further, many of the items “covered” by flight insurance are available to airline passengers automatically. Some of them allow airlines to get out of what they owe to passengers, according to Smarter Travel. Lastly, consider the exclusions in the travel insurance plan. A recent NBC news report states that travel insurance protection is actually very thin, and the exclusions make the coverage somewhat sketchy. Those inclusions include things like delays caused by the following common reasons for flight delays and/or cancellations: It also excludes things considered pre-existing conditions, including pregnancy and childbirth or “reasonably foreseeable” problems resulting in delayed or canceled flights from protection. Considerations Concerning Travel Insurance The next time you are faced with the question of travel insurance when booking your travel, consider these points before clicking to buy. Most of the time, the answer to these questions will answer your questions about the necessity of travel insurance.

Should You Take the Travel Insurance?

View Resource Should You Take the Travel Insurance?
The weeks and months leading up to your maternity leave are as exciting as they are terrifying. You have spent many months preparing for the changes to take place in your life and your home. Now, it is time to prepare financially for the challenge of extended time off work for maternity leave. Understanding Your Health and Maternity Benefits For the most part, companies only provide brief maternity leave periods. With an effective plan, though, you can have plenty of time to enjoy your newborn before returning to work. However, it would be best if you began by understanding the health and maternity benefits your employer provides. Work with the HR representative in your company to understand what your health insurance and maternity benefit your organization provides. Specific questions you want to ask include:
  1. How much of your health insurance deductible have you already paid for the year and how much remains?

  2. Are you responsible for co-payments or coinsurance? If so, how much?

  3. What is your maximum out-of-pocket for your specific insurance policy?

  4. Will you be responsible for additional health insurance while on leave?

  5. Does your organization offer some paid maternity leave? If so, how much? The U.S. does not require businesses to offer paid maternity leave through the Family and Medical Leave Act (FMLA) requires most businesses to offer up to 12 weeks of unpaid leave after having or adopting a baby. Some organizations do offer paid maternity leave, though.

  6. How many vacation days have you accumulated? Your company may require you to use your vacation days and PTO before using your FMLA benefits, which allows you to get paid for some of that time.

  7. Do you have a short-term disability plan through your company? If so, does it provide for income during maternity leave, and how much?
You should note that some companies require employees to repay health insurance payments they covered during your leave if you do not return to work. The better understanding you have of your income and obligations during this exciting time, the better prepared you can be for creating a savings plan and budget for the time leading up to the big day and after. Saving and Budgeting Hopefully, you begin this process early in your pregnancy and have a few months to prepare for your upcoming maternity leave. The sooner you start making preparations and saving money, the better it will be for your budget after the baby is born. Unfortunately, this all comes at a time when many expenses are cranking up as you prepare your home for your little one’s arrival. The key is to reduce expenses during this fantastic time in your journey while making sure you have the necessities in life covered, without going into unnecessary debt. Knowing your finances are in the right place will make this vital bonding time with your baby more enjoyable and relaxing. Creating a Plan that Will See You Through Your Leave Starting early and creating a plan that carries you through your maternity leave allows you the ability to enjoy your full maternity leave without worrying about keeping the lights on or going into debt to do so.

Making Financial Preparations for Maternity Leave

View Resource Making Financial Preparations for Maternity Leave
Your first paycheck can be quite exciting. However, before you open your pay envelope and look at the total, you need to have a plan in place to maximize your income and get the most mileage from your money. The advice below will help. Your First Paycheck That first paycheck represents real changes in your life. Whether this is your first job in high school or your first job as an “adult” after graduating from college, it is essential to make your money matter as much as possible by starting impeccable spending and saving habits from the very beginning. The decisions you make with this and subsequent checks will have a direct impact on your attitude about money and your ability to manage it effectively. Keep these things in mind for your first paycheck, and every paycheck that follows. Understanding Your Deductions and Taxes While most people expect to see taxes taken from their checks, many are surprised by the sheer amount of withholdings from their checks for tax purposes. Initial tax withholdings include: Some cities and states add their taxes into the mix for even higher withholdings. Depending on where you live, those additional taxes can feel painful coming out of your check before you ever see your money. Do not forget to notice other withholdings from your paycheck such as 401K contributions, medical insurance fees, HSA (health savings account) deposits, and the like. Once you understand how much of your check is left over after tax withholdings, you can build a better budget that takes your take-home income into account, allowing you to pay your bills each month and set aside some of your income for savings. Budgeting Budgeting is one of the most important things you can do once you are out on your own and making money. Learning to effectively budget allows you to live within your means without going into unnecessary or unwanted debt. It also helps you understand your spending habits, where you can make changes, and sacrifices you may need to make to save an adequate amount of money each month. The key to effective budgeting is to do all the following: When you create a budget that does all these things, it is easier to stick with your budget and helps you achieve your financial goals faster. Automated Savings and Transfers The more streamlined you make your efforts to save money, the better your efforts to do so will be. One of the best tools at your disposal is “automation.” That includes automated bill payments, as well as automated savings and money transfers into your savings. When you automate the process, you do not have to think about it or remember to do it each month. More importantly, if you have the money set to leave your account as quickly as it enters, you also do not have an opportunity to spend it on something else before you “pay” your savings account each month. There is a mental component to this as well. If you do not ever hold the money in your hand, it is harder to miss. By automating the process, the funds targeted for savings are not even around to tempt you before they are routed off to their intended destination. Putting Everything Together for Easier Money Management While your first paycheck is exciting, and most people want to rush out and enjoy the fruits of their hard work, the following advice can help that first paycheck keep on paying you long after the initial deposit has been made: These simple steps will help you build wealth even at a time when your paychecks feel so small.

First Paycheck? Do These Things First

View Resource First Paycheck? Do These Things First
When you have a long list of holiday gifts to buy, it can really pay off to spend time looking for deals on those gifts. Every deal you find is more money you get to keep in your pocket or spend on someone else. However, finding the deals and knowing when to buy can take some of your time and attention. Start preparing now so you are ready to shop when the deals start rolling in. From Black Friday to Cyber Monday It used to be that Black Friday, the day after Thanksgiving, was the biggest shopping day of the holiday season. Stores offered huge sales to bring customers in the door and, for many stores, bring their calendar year sales from the red into the black. Online merchants have focused their attention in recent years on Cyber Monday, offering great deals on the Monday after Thanksgiving. In the last couple of years, though, stores have expanded their sale window to extend through much of the week surrounding Thanksgiving. Deals start popping up the day before Thanksgiving, on Thanksgiving afternoon and evening, and during the weekend between Black Friday and Cyber Monday. Therefore, you’ll need to be on alert for the whole week to really get the best deals on your holiday purchases. Strategies for Maximizing Your Savings Through all of the holiday shopping frenzy, maintain a big-picture perspective on your spending. Yes, you might be able to get a great deal on an item, but if that item still costs far more than you were planning to spend on a gift for that recipient, you may be better off skipping the purchase. Sometimes a thoughtful or homemade gift is just as good, and far less expensive.

Find the Best Holiday Shopping Deals

View Resource Find the Best Holiday Shopping Deals
Once upon a time, it would have been the ultimate taboo to ask for cash as part of a wedding gift registry. Back in the day, couples were starting out and often establishing their first households, so they needed everyday items as gifts. Today, people are getting married later in life. They have usually already set up living spaces, apartments, or even bought a home before taking a walk down the aisle. So, it is less common for them to need the essential registry items of yesterday and to benefit more from gifts that involve cold hard cash. Fortunately, it is not as uncommon today, as you may have been led to believe, for couples to ask for cash in place of wedding gifts. In fact, the wedding planner site ‘The Knot’ has listed ‘asking for cash’ as one of its top wedding trends for 2018. Proper Etiquette Of course, there are still many wedding guests who may be put off by cash gift requests. One thing personal finance website Bankrate recommends is that you tell your guests what the cash will be used for when doing so. That allows them to feel like they are contributing to a more substantial gift rather than merely giving away money — especially if this gift involves something for the couple’s future, such as a down payment on a home, a honeymoon trip, a pet adoption, kitchen appliances, or new furniture for the bedroom. The more specific you can be about how you will use the money, the better. Oddly enough, in many cultures, it is traditional to give gifts of cash. It has only recently become a trend in the U.S. There are things you can do that will make it feel less awkward. Cash Gift Registries Cash gift registries are excellent tools to help you ask for cash without feeling awkward about doing so. Before you dive in, though, be aware of (and communicate) the fees that may be involved for you or your gift-giving friends, family, and wedding guests. Registries to consider include: With more wedding registry sites like these cropping up all the time, it is easier than ever to let your guests know that cash is a welcome alternative to another toaster or more towels. Putting it Into Perspective Ultimately, it is your big day, and the people who attend your wedding are your guests. Registries offer an opportunity to ask for things that are important to you as a couple or that can help you acquire those things. Few items work better than cash for both objectives.

Building a Cash Wedding Registry

View Resource Building a Cash Wedding Registry
Financial literacy is one of the primary life skills that some argue we fail to teach adequately in middle schools today. That leaves the responsibility for educating middle school students squarely on the shoulders of today’s parents. Many of these parents feel they are entirely unqualified to teach on the subject, due to their money struggles. Whether you feel like you are barely managing to manage your money or that it is ultimately managing you, only you can help your children avoid similar struggles as they enter the workforce and begin managing their finances. These are a few vital lessons your middle schooler needs to know – as a foundation for greater financial literacy later in life. Earning Money Your child needs to understand where the money comes from and that it is mostly an exchange of one thing for another. Earning money comes mainly from the fruits of their labor. Whether they labor mentally or physically, there is work required to make money. Once they understand this fundamental fact and see it in action in their lives, they can begin to comprehend its value on a different level. It is only then that they begin to correlate the value of the things they want to buy with the amount of time and effort needed to earn money to do so. Spending Money Let your middle schooler help with grocery, food, and clothing shopping. It gives real-world experience for understanding how much things cost. Consider helping your child get real work experience by doing the following: By the end of the shopping trip, your child will have learned a valuable lesson about the costs of groceries for a household and have a new appreciation for what you go through each week to keep food on the table. More importantly, your child will understand the process of spending money on essential items, like food and groceries. Saving and Investing One of the most challenging lessons to teach middle school students in today’s consumer-driven society is the value of saving rather than spending. It is hard to instill these values when all around them, people are buying the next new thing to hit the market as soon as it comes out. However, teaching them young to put half of their earnings into savings allows them to watch their savings snowball, and encourages them to prioritize their spending, so they only spend on what matters. Once they have a sizable amount saved, you can show them the value of investing and how that can kick their savings efforts into high gear! Borrowing Money Borrowing is a tricky issue to tackle with children. Some middle school children will struggle with the concept that money borrowed must be repaid. However, requiring your middle school child to return borrowed money fosters an even greater appreciation of the “contract” whether written or implied, of borrowing money and the importance of repaying it promptly. You might also want to consider creating penalties, late fees, or “interest” for your child if the money is not paid back as agreed. Takeaways You Can Use to Build Your Child’s Money IQ Teaching middle school children valuable lessons about money is something you can do, even if you are struggling with money yourself. Use the advice above to help your middle schooler handle, manage, borrow, and spend more responsibly.

Things Your Middle Schooler Should Know About Money

View Resource Things Your Middle Schooler Should Know About Money
If you are like most parents with children in high school, you are so busy trying to stay ahead of expenses that you do not have time to think about the opportunities your child’s high school offers to educate them about money. Financial literacy is one of life’s primary skills needed for success. Yet, according to the 2017 National Report Card on State Efforts to Improve Financial Literacy in High Schools, issued by the Champlain College Center for Financial Literacy, only five states received an “A” for their efforts to teach financial education, and an astonishing 27 states received grades “C”, “D” or “F”. For most, then, that leaves the responsibility for educating high school students squarely on the shoulders of today’s parents. Unfortunately, some parents may even feel they are entirely unqualified to teach on the subject, due to their money struggles to take on the mantle. Making Financial Decisions One way you can help educate your child about money and finance is to allow your child to make a few financial decisions on his or her own. While you are not handing over the keys to the bank account, you can set your teen up with an account of his or her own while you hold the reins, set spending limits, and monitor transactions. That ends the constant run to mom or dad asking for funds and forces teens to make financial decisions based on the money that is available to them. Making Money While some parents would prefer their teens not hold jobs while going to school so they can focus on making better grades or participating in extracurricular school activities, they do need opportunities to make money on their own to learn about budgeting and finances. Aside from part-time jobs where they earn regular wages, other opportunities exist for teens to make money that will not interfere with their education such as: There are all kinds of opportunities available to teens, including some part-time jobs that only require a few hours of their time each week. Budgeting Basics Sit down and work with your teen to create a budget for their essentials. This includes the things that are necessary for them to get through their week that aren’t food, such as: Give your high school student a strict budget to work with every month with the reminder that he or she needs to plan for larger purchases and may need to sacrifice smaller purchases to make room for more significant expenses along the way. It also allows them to see the value in shopping sales, comparing prices, using coupons, and ditching name brands in favor of more cost-effective products in a pinch. Banking Basics Setting high school students up with student accounts from their parents’ banks allows parents to monitor their activity with a safety net in place. That prevents them from getting in over their heads while giving them an invaluable education in how to operate their bank cards, balance their accounts, and manage their money. Keep these things in mind, though to make it a positive learning experience. Working with your teen to make sure he or she understands banking basics now will help prevent big banking mistakes as adults. Send Your High Schooler into the World with Solid Financial Skills Please do the following to help your teen develop financial literacy before they need to put it into action on their own. The thought of sending your high school student out into the world is thrilling and terrifying at the same time. Follow these critical steps so you can be confident you’re sending your teens into the world with the education they need about money.

Things Your High Schooler Should Know About Money

View Resource Things Your High Schooler Should Know About Money

If you are starting your search for a home and considering a home loan, you should use this handy financial tool to first calculate how much you can afford.

Your ability to obtain a loan for a new home purchase is based on a number of factors. Lenders typically make lending decisions based on three key ratios: (1) Loan-to-value ratio (LTV), which represents the ratio of the loan amount to the value of the home. Lenders ideally want to see an 80% LTV, meaning a 20% down payment is preferred; (2) Housing Ratio. which represents the percentage of your total income that goes towards housing expenses; and (3) Debt-to-Income Ratio, which represents your total debt payments, plus housing expenses as a percentage of your total income. Lenders will typically look at any of these ratios as constraints, meaning once any of these ratio limits is reached, the amount of the loan will be capped.

Experience the Difference of Banking Local

At First Mutual Bank, we understand your unique needs. Whether you’re looking for personalized banking solutions, competitive loan rates, or expert financial advice, we have what you need!

Start Banking Local 

Home Affordability

View Resource Home Affordability
Mobile phones are everywhere now and are no longer just for making calls and sending texts. People use their phones for everything from navigating a new city to watching TV, getting work done, and managing calendars. It is only natural that over the course of the last decade, many people have come to use their phones more often than they use their wallets when making a purchase. There are several major types of mobile payments, each with a different method of making the payment and different overall purpose or use. Simply speaking, online mobile payments are when you use your mobile device to make a payment via an app or website. You might use your credit card or bank account information as the actual payment method, which you need to enter in the app or website if you have not previously saved it there. Direct carrier billing is another type of mobile payment, but rather than using a credit card or bank account; the charges are added to your phone bill. Buying apps and making in-app purchases tend to be the most common types of direct carrier billing. Depending on your mobile phone carrier, you may also be able to purchase digital content, like TV shows or movies, through direct carrier billing. SMS payments allow you to send money to someone by entering their phone number in a payment app. The recipient gets a text notification to their phone and, if they have not previously done so, must designate an account to receive the money. It could get deposited into a bank account, PayPal account, or another type of digital account. Mobile point of sale payments allows vendors to accept payments from physical credit cards swiped through a reader attached to a mobile device. The touch screen of the device itself displays the details for the buyer to confirm the purchase. This method is often used by small businesses that do not want to use a stationary point of sale console at a store, but instead receive payments at different locations and want the flexibility of accepting credit card payments from anywhere. Square, PayPal Here, LevelUp, and Shopkeep are some of the biggest mobile point-of-sale providers. Mobile wallet payments using NFC (near field communication) are arguably the most exciting type of mobile payments. They allow users to make purchases in stores using their phones, rather than needing to use cash or a credit card. Payments are typically made through the terminal that processes credit and debit card payments, but rather than swiping a card, you only need to bring your phone in close proximity to the terminal and confirm on your phone that you want to make the payment. Choose from several mobile wallet options, depending on the type of device you have.

The Basics of Mobile Payments

View Resource The Basics of Mobile Payments