Frugal economy. . . .

The more I read about our collapsing economy (I'm an internet news addict, these days), the more I thank my lucky stars that I began paying off debt and saving money almost 12 months ago. One of my bank accounts (no longer used for anything other than ATM withdrawals) is at Washington Mutual, which, as I'm sure you've heard, 'failed', was taken over by the government, and is subsequently being sold to J.P. Morgan Chase. Incidentally, I heard this news late last week; by today, my ING Account showed not 'WAMU' as a linked account, but in fact 'J.P. Morgan'! They certainly didn't waste any time!

Last week (or, geez, was it only a few days ago?), I wrote about my upcoming lump sum payment for a retroactive pay increase. I intend to send this money to my credit card, paying off about $1,000 in debt in one fell swoop! I also contemplated using some of my emergency fund (of which I have $1,600) to pay off the rest of my credit balance. Several commenters thought I should keep the emergency fund as it is, 'just in case'.

I'm definitely leaning in that direction, folks, not only because of the points my commenters brought up, but also because of this financial article, reminding readers what to do in an economy like ours. Basically, the author suggests that we should act as if we were preparing to lose our jobs! In short, this means:

• Decreasing contributions to a 401(k) or 403(b). I already did this last spring, when I became determined to pad my emergency fund (something the author recommends) and pay down my credit when a labor strike seemed imminent.
  
• Eliminate unnecessary payroll deductions. The author uses charitable donations as an example, which seems sad. However, I suppose in the long run a strategy like this would work better for charities anyway; keeping oneself healthy financially in the short term would allow one to increase donations in the future.
• Reduce income tax withholdings. Or, put another way, decrease the money that you'll receive as a refund later and increase take-home pay now.
• If you're still brave enough to be investing in the stock market, diversify. Personally, I don't have the stomach to even look at my tax deferred investment account, let alone play with the contributions.
• Pay off any 401(k) loans. Hopefully none of us have taken a loan on our retirement!
  
• Research life and health insurance options, in the event of a layoff. Find out how long you're covered and for how much; if you're lucky enough to have a spouse or partner who has coverage, consider switching to their plan.

So there you have it. Luckily, I'm already doing all of these things and more, although I'm still nervous, of course. My job is secure---for now. But it's nice to have even a smallish emergency fund to back me up in the event of a financial meltdown.

In other news, Dave Ramsey's coming to town on November 1st, and I can't decide if I want to shell out the $36 it would cost to see him in person. I know it would be a great motivator and reminder---Dave's book, The Total Money Makeover, is one of the first financial books I read that catapulted me into my frugal lifestyle. I'll have to see how much money is left in my checking account after I've sent my mega-payment to the credit card company later this week!

Festival of Frugality. . . .

Thanks to Rather Be Shopping for including my post, "Frugal healthcare. . ." in the 121st Festival of Frugality. . .the Tax Day edition, to be published tomorrow!

Frugal healthcare. . . .

I am an admitted eavesdropper, especially when I'm on my 20 minute commute on the local lightrail. The topics people choose to discuss between themselves and over cellphones in public never ceases to amaze me.

Last week, I was privy to a conversation that a young woman was having about a family member who had suffered a seizure, leaving her unable to speak, and without the use of her right leg. The family member does not have health insurance. Local hospitals were willing to stabilize her, but not treat her in the way that she needed---because they knew they would not be paid. The young woman was counseling another family member about how to get healthcare in Canada. She suggested driving the sick relative to Vancouver, BC (we're about a five hour drive from Canada), visit a hospital there, and claim to have been staying there on vacation when the seizure occurred. Because Canada has universal health insurance, the sick relative would be treated at no (or very little) cost.

Aside from feeling horrible about this woman's precarious situation, I also felt incredibly lucky to have an employer who covers all of my health insurance costs. I pay $1 for prescriptions. I pay nothing to see a doctor. Nothing to see a dentist. Sure, it's an HMO, but I'm covered.

What about people who don't work for employers who offer health insurance? How can they find insurance that is affordable and that will protect them from unexpected illnesses like this woman's seizure? I was so moved by the conversation that I heard last week, that I did a little reading, and here are some suggestions:

First, check your state government website. Many states, including mine, have information for consumers about obtaining all kinds of insurance, including health insurance. In fact, my state ever offers government insurance, for those who have been denied coverage by private insurance companies.

Then, compare quotes. There are many health insurance companies that will take information over the phone and will provide a quote within minutes. Call several companies to see what your options are, and how inexpensively you might obtain the same level of insurance coverage. There are even online sites where you can receive several quotes over the internet, without ever picking up the phone.

If you have auto or home insurance, see if these companies offer health insurance. Sometimes, insurance companies will give you a discount if you have multiple lines of insurance. However, be careful: you might save money if you were to go with a different company altogether, so continue to compare costs and coverage with other companies.

Consider how much you are willing to pay for prescriptions, copays, and deductibles. If you're able to agree to a higher deductible, your monthly premium will oftentimes decrease. The same goes for the percentage you're willing to pay for prescriptions and copays to see a doctor---the more you're willing to pay upfront for these services, the less your premiums will be.

Quit smoking! If you're a smoker, then quit as soon as you possibly can. Smoking is a risk factor that is taken into account by health insurance companies, so smokers will pay higher premiums than non-smokers. And calculate how much money you'll save---no cigarettes to buy, plus lower premiums. It's a win-win situation.

Lose weight! Again, if you're overweight (as defined by the insurance company), you may be seen as a higher risk---and you'll pay higher premiums. Now might be the best time to stick to that new exercise and diet regime; it may literally save you hundreds of dollars a year.

Consider your profession. Do you work with chemicals? In high rise construction? Professional tightrope walker? These professions might be considered high risk, and might contribute to higher premiums as well.

Clearly, the best way to obtain affordable health insurance is to work for an employer who offers it, and then do your best to stay healthy. However, if you're still looking for that perfect job with the perfect benefits (if you find it, let me know), private health insurance is a must-have in our country, with the exhorbitant cost of hospital and emergency care.