Health care sharing ministries: An alternative to Obamacare?

Published 4/15/14

Health care sharing ministries: An alternative to Obamacare? By Holly Johnson

The first open enrollment period for the Patient Protection and Affordable Care Act, commonly known as Obamacare, has come to a close, and a reported 7.1 million new enrollees are currently settling into their new health insurance plans.

Now that open enrollment is over, Americans who chose not to purchase a plan must pay the greater of $95 or 1 percent of their net income in 2014. There are only a handful of ways for individuals to escape this mandate, and they include certain exemptions based on citizenship status, income and hardship. Another little known fact: Families can also avoid the individual mandate by joining a recognized health care sharing ministry.

What is a health care sharing ministry?

Health care sharing ministries work much like their name suggests. Individuals who join a ministry pay a monthly share or pledge that is then distributed to someone in the ministry who is experiencing a health care need.

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How lottery tickets are helping people save money

Published 4/8/14

How lottery tickets are helping people save money By Justin Boyle

Imagine this: You walk into a credit union to open a savings account, and the teller responds by selling you lottery tickets.

Odd as it may seem, this type of scenario plays out all over the world. They're called prize-linked savings accounts, and a few states in the U.S. are making use of them to give residents a little extra incentive to put money away for a rainy day.

A long history

Prize-linked savings accounts might seem like an innovative concept, fresh off the desk of some ground-breaking personal finance start-up founder, but the truth is that they've been around longer than the United States itself. In 1694, to help defray debt incurred during the Nine Years' War, officials in England instituted a public investment program that offered substantial lottery prizes to around 2.5 percent of investors (and an APY of 6.15 for 16 years, believe it or not).

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Helping a financially troubled friend (without spending a cent)

Published 4/3/14

Helping a financially troubled friend (without spending a cent) By Georgie Miller

So you've done it: Your financial life is under control. You've strengthened your finances by completing most, if not all, of these key financial tasks:

  • Created a budget to ensure you're not spending more than you earn.
  • Stashed some funds in a high-interest savings account in case of an emergency.
  • Taken advantage of a low interest balance transfer to decrease the interest you are paying on consumer debt (or paid off your debt entirely).
  • Optimized your spending by choosing the best credit card reward programs for your habits.

You feel like shouting about your success from the rooftops! You are excited to share how time, patience and determination allowed you to conquer your debt demons. Unfortunately, friends or family may not appreciate your success story -- particularly if they're still struggling.

How can you help the people you love through their financial difficulties, especially when lending money to loved ones can be dangerous? Let's say you can't (or won't) drop a wad of cash to solve someone else's money woes. Try these simple strategies for offering support:

1. Give them time to recognize their mistakes

It can be tempting to lecture people if you believe their problems are of their own making -- especially if the solution seems obvious to you. Similarly, it can be tough to hold your tongue when a loved one is on the verge of making what you believe is a financial mistake.

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Help! My teen is a money monster

Published 3/28/14

Help! My teen is a money monster By Peter Andrew

Short of bequeathing them so much money ($150 million each should do it) that they never have to worry about their finances, there are few gifts you can give your kids that could be more valuable than the skills and attitudes they need to be great money managers.

By the time they reach their mid-teens, you can pretty much see how their financial lives are going to pan out: Mary and Bob are forever borrowing against next week's allowance, while Tom and Jennifer have a thriving schoolyard loansharking business and robust balances in their savings accounts.

Often you don't have to wait for kids to hit puberty before you begin to spot the signs of competent or catastrophic attitudes to cash. One day you're changing their diaper, and the next, it feels, you're either lending them a couple of dollars or raiding their piggy banks. And, sometimes, siblings in the same family have very different money habits, even though they've all been brought up with the same financial norms, advice and education.

Genes, elephants and money

We're a long way from discovering the money gene, but last year Chase published an academic study that asked whether we all leave our mothers' wombs with our financial skills and attitudes pre-programmed. In "Born to Spend?," Professor Hersh Shefrin differentiated between two types of thought processes: "Fast thinking" tends to be instinctual, while "slow thinking" is more strategic.

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Growing your savings with a zero-sum budget

Published 3/14/14

Growing your savings with a zero-sum budget By Holly Johnson

People would probably laugh if they saw my checking account balance toward the end of the month. There have been times when I've had as little as $20 in it, and all I could do was count the days until the 1st of the month rolled back around.

However strange this may seem, rest assured that it's totally intentional. That's because I purposefully spend every dollar we come across in a monthly planning and savings scheme sometimes referred to as a "zero-sum" budget.

The purpose of a zero-sum budget is to "spend down" all of your monthly earnings until you completely run out of money each month. This accomplishes several things: First, using a zero-sum budget forces you to allocate all of your money to something, which cuts down on waste. Second, zero-sum budgeting requires that you pay money to savings and your investments as if they were bills, which helps you save more than you would have otherwise. And third, a zero-sum budget forces you to commit to spending thresholds in each category.

That all sounds great, right? If you're interested in creating a zero-sum budget of your own, the following steps can help.

Get a month ahead

One strategy for zero-sum budgeting is getting one month ahead of the game. To do this, I suggest using savings for your regular bills and spending while stashing away your monthly earnings at the same time. This strategy is especially advantageous for those with a fluctuating income since this month's bills will always be paid with last month's earnings.

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Novel ways to teach kids about saving money

Published 3/7/14

Novel ways to teach kids about saving money By Justin Boyle

I had just turned 8 years old when my mother took me to our neighborhood bank branch to open my first savings account. I had $20 in birthday money from my aunts and uncles and was about to learn valuable lessons about putting money away for the future.

But to hear my mother tell it, the only thing at the bank I wanted lessons about was the coffee machine. I walked out of there remembering my first taste of French roast much more vividly than my first taste of financial propriety.

Now, don't get me wrong. The old-fashioned "open a normal savings account with a friendly banker" approach might work for some kids. If you want to take a more creative direction though -- or if your kids are also at risk of becoming writers, who care more about coffee than practically anything -- here are a few tricks you can try.

Piggy banks 2.0

Maybe it's time we admitted to ourselves that the piggy bank has its drawbacks as a learning tool. The process of making even medium-sized deposits can be a chore, and there's no real way to check your balance without breaking and entering -- not to mention that it's possibly the worst option on the market as far as savings account interest rates are concerned.

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