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Archives for November 2013

Buy Nothing Day: Boycott Black Friday

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So Many Offers, So Little Time

Black Friday. It’s nearly two weeks away. The special ad sections will likely be arriving at your doorstep, and people are already cataloging all the rumored offers. What will you buy? What will you “save” on? Look at those incredible deals in the special ads! I haven’t seen [Insert your item here] at these kind of prices anywhere! Wow, glorious corporate gods, you’ve smiled upon us today.

The infatuation and energy is enough to forget what we’re actually celebrating next week. Hopefully you can read through my dripping sarcasm to realize that Black Friday is not a favorite of mine. In fact, I think it’s a travesty and an assault on families all over America. My family included, we compromised plans for Thanksgiving in order for a Fortune 500 company to reap the rewards of increasing consumer demands and take my relative away.

Buy Nothing Day Black Friday
Photo: ABCNews

Goodbye Holiday, Hello Deals

Following a slew of similar announcements from stores including Target, Best Buy and Macy’s, Walmart said Tuesday that it will hold two major sales events at 6 p.m. and 8 p.m. Thursday, two hours earlier than last year.
–USAToday

This year, many retailers will be encroaching even further on family and friend time by opening at 6 PM on Thanksgiving. The early start is forcing people to rethink the concept of “Black Friday.” Rather than recognizing what we are thankful for, helping others, and bringing people together, this holiday has been entirely co-opted by major businesses for gargantuan profits.

Marketing campaigns of epic proportions convince us that now is the time to save – the only time. The fact is Black Friday deals are temporary, and most if not all items will eventually hit these prices. These “steals” and “deals” are made up to capitalize on psychological vulnerability.

The Answer: Buy Nothing Day

There’s an alternative to mall trampling stories, waiting out in the cold, and losing our Thanksgiving dinners. It’s time to start talking about Buy Nothing Day. Started by the protestors at Adbusters (credited with starting Occupy Wall Street), the holiday from Black Friday tells us one thing: resist the urge and enjoy your friends, family, and what you already have.

This horrible holiday of consumerism only comes once a year. Try something different, and save your wallet the punishment of swiping away your savings accounts for “once-in-a-lifetime deals.” Life is about more than a low price and your time with those you care about is truly priceless. There are only 30,000 days to make this special, and it doesn’t start with a weekly ad.

For more information about Buy Nothing Day: https://en.wikipedia.org/wiki/Buy_Nothing_Day

5 Rules To Follow Before Accepting Student Loans

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5 Rules To Follow Before Accepting Student Loans

The “Award”

Every year of graduate school, I’ve been “awarded” $16,000 in student loans. Without hesitation, I’ve accepted nearly the full amount (despite financial destruction and crisis). At the beginning of this year, I decided to seek support. Full of misconceptions, misguidance, and falsities, I decided to step into my financial aid office for help. When I left, I realized mistakes that had already cost me thousands of dollars. Why hadn’t I done this sooner?

Despite feeling financially literate, I was continually making poor financial choices. I hadn’t ever read or been educated about student loans. Despite the fact that you must sign an agreement to pay student loans off in a certain period of time, something about it just didn’t compute. I blindly accepted them as the reality of an education. No formal class in primary or secondary or post-secondary school explained these complicated financial instruments that could affect my life for decades. Absolutely, some of the responsibility falls on my shoulders for this self-imposed, willful ignorance.

Student Loans Are Not Your Friend

Student Loans Debt Money To Burn GIF

Applying for Federal student loans is easy. Federal aid is disbursed two times a year (once in the fall and once in the spring). Before receiving aid, students must fill out FAFSA (Free Application for Federal Student Aid). Fortunately, for graduate students like me, it’s easy enough. I have no contributions coming from parents and no extra income. The application takes about 15 to 20 minutes each March.

Understanding the consequences of student loans is obsequious at best – bordering on impossible. As I’ve stated, “I’m convinced that students (me included) are not able to accurately calculate and convert a bucket of student loan debt into a monthly payment – with compounding interest – on a salary that doesn’t exist yet.” Repayment plans are only the beginning, and the depressing reality is that you could be well into adulthood before you’re done.

photo
Photo: Nazareth College

After meeting with financial aid counselors, I came away with 5 rules that you must follow before accepting student loans:

1. Make a budget

This can be a daunting task. Detailed, informative budgets take time and honest critiquing – sometimes by close friends and family. My budget took me about three to four hours to complete. After diving through receipts, account statements, and credit card payments, I created a solid list of must-haves. These include: rent, utilities, food, car loan, car insurance, health insurance, dental insurance, gas, and leftover student fees and tuition. In total, my monthly budget sits around $1500 for everything necessary to keep my current standard of living. There’s a deficit each month, and that’s where student loans come into the picture. The key is to have this self-effacing, honest, frugal budget in hand when you talk with a financial aid counselor (see rule 2).

2. Talk to a financial aid counselor

This is a lesson I learned the hard way (having lost thousands of dollars to interest): Talk to your financial adviser at school to help strategize your student loans. Despite a lot of information being publicly available, they’re resources with years of experience. Trust their expertise and come with questions. How can I reduce my amount of aid? How can I better balance my budget? What do repayment plans look like for the amount of debt I might be taking out? You pay their salaries with your student fees – take advantage of it. It was in my conversation with a counselor that I discovered a trick to student loans that could’ve saved thousands.

3. Divide disbursements across the semester

Once you’ve created a solid budget and discussed your potential financial situation with your counselor, it’s time to come to a solid number. This next academic cycle, I’ll be taking about $12,000 less in loans. That leaves me with $4,050 for the 9-month year, which will disburse about $2,025 (less a 1% origination fee from the government) per semester. Here’s where I messed up in years prior: If you ever underbudget or overbudget you can “reactivate” a loan and adjust the value to a more appropriate level at no added cost. So, what does this mean for you? Well, if you disburse your semester funds ($2025 in August and January), the clock will be immediately running on your debt. For me, that’s a 6.8% interest rate slapping me across the face and keeping me awake at night. The key is purposively under-budgeting. Let’s say your budget needs to account for $4,000 in August disbursement and $2,000 will be needed around late November. Instead of taking out $6,000 all at once, request a reactivation and increase the student loan later on the semester. Otherwise, this large chunk of funds sits in my savings account (likely making an abysmal amount compared the government’s fees) going unused until later on in the semester.While the 1% origination fee will still apply, this will save you thousands of dollars in interest (because the 6.8% only applies to what is currently disbursed) over the course of your education because you won’t have money sitting, waiting to be spent on your monthly budget.

4. Ignore intriguing, teaser rates from private companies

In a brief period of desperation to try and reduce the strangely abhorrent Federal rates for aid, I looked to private companies that were teasing me with rates just above prime (~3.5%). Despite the initial appeal, these are deeply disturbing loans for people that don’t have guaranteed funding opportunities upon graduation. Unlike Federal loans, private companies do not offer deferment and forbearance options. If you aren’t making as much as you expected or don’t have a job, the government will work with you on repayment. If this occurs with private loans, you’ll be swimming with bankruptcy notices and calls from debt collectors. Stick with the government.

5. Apply for departmental and/or institution-based scholarships

While I wrote about applying for $50,500 worth of scholarships in 70 minutes, these online opportunities are inundated with applicants. The likelihood of winning one could easily be compared to the lottery. The reality is that you’d be better off looking for scholarships at your local institution. Applying for these scholarships is a more straightforward, open process. Usually, they require a personal statement of interest, transcripts, and FAFSA information (to consider financial need). Larger universities tend to have a variety of merit and need-based scholarships and they’re worth applying for as soon as possible. If you are awarded a scholarship, you can immediately contact financial services and reduce your loan award!

Some of these rules and tricks can be complicated. Before changing your budget, student loans, and/or disbursement schedules, go to your financial aid counselor. Their help could save you thousands of dollars; heck, it only took me 15 minutes to realize everything I was doing wrong.

7 Ways To Save On Prescription Medications

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On Prescription Medications

This is a contribution from Syed of The Broke Professional! He runs an up and coming personal finance site for working professionals. On top of that, he’s a practicing doctor. Thanks for the article, Syed!

America is sick. It is reported that around 70% of Americans are on at least one prescription drug and around half of the country is at least on two. That’s a lot of pills for a lot of people.

As a doctor, I can definitely confirm this. I see multiple patients every day who are on a cocktail of medications. This is a tremendous problem – financially and physically. Medications can get expensive, especially if you have to take a lot of them.

So today, I’ve compiled a few ways that I think can really change the game when it comes to paying for prescription medications:

1. Ask For Generic Medications

This should be the first thing you ask your doctor. Doctors may give you a brand name medication because of incentives from a company or just because they are used to writing it. It never hurts to ask for a generic, and there can be huge cost savings. Now, there are times when brand name medication may work better than a generic, but it definitely pays to ask. Usually, it is actually cheaper to pay for a generic out of pocket than a brand name that is covered. Always ask your doctor if there is an appropriate generic medication you can take for your condition.

2. Shop Around

Many people are unfortunately unaware that you will pay different prices at varying pharmacies for the same medication. Call ahead and around to your local pharmacies to see if there might be savings. Some pharmacies even have low prices for commonly prescribed medications. Generally, warehouse stores such as Costco and Sam’s Club have much better prices than other pharmacies. It is definitely worth it to call or visit different pharmacies in your area to get the best price.

I prescribe medications on a regular basis, and when patients come back for their follow up exams I always ask how much they paid. I’ve gotten wildly different answers for the same medication, even with insurance coverage! It really is worth your time to call around to your surrounding pharmacies and get the exact price.

3. Consult The Drug Formulary

To add more confusion to the health maze, not all insurances cover medications the same way. Because of this, it pays to check the formulary, which is the list of medications that your insurance will cover. Insurance might cover medication A for a disease, but not medication B. You should check with your doctor to see if they can preferably prescribe a drug which is already on the formulary. Being prescribed a non-formulary drug and getting sticker shock at the pharmacy is no fun.

4. Ask For Samples

Ralph The Simpsons Drugs Medications Pills

Doctors get bombarded by drug reps who want them to prescribe their companies’ medication. Sometimes they give doctors samples of prescription medications. If the doctor tells you a brand name medication is necessary, be sure to ask for any samples they may have. That will at least give you a few days supply so you can shop around at different pharmacies.

5. Ask For Coupons

Similar to the last point, drug reps sometimes leave coupons for certain medications. Some websites (such as needymeds.org) also have coupons for various medications. Many drug companies have reduced cost programs for certain drugs. It never hurts to ask if something like this exists.

6. Get A Second Opinion

There can sometimes be more than one way to treat a condition. Certain levels of high blood pressure, for example, can be treated with a medication, or simply with diet and exercise. When you get a potentially serious diagnosis and the doctor insists on one way of doing things, it might be worth your wallet to get a second opinion.

You can ask family and friends for any trusted doctors in the area and see if there may be an alternative. In the aforementioned example, controlling blood pressure with diet and exercise may be all that is needed, which can lead to better health overall and definitely some money saved. Some doctors may be quick to pull the trigger on prescribing medications, so that could be the right time to seek another opinion.

7. Use An FSA Account

Many workplaces offer flex spending accounts to their employees. What these accounts do is set aside a portion of your pay for the year, decided by you, and give you a debit card with that amount that can be used on certain medical related expenses. It can be a game to see what exactly is eligible, but FSA money is definitely eligible to be spent on medication.

The main advantage of an FSA is that the money you have set aside is not calculated as part of your income. So instead of using money that has already been taxed, you can use pre-tax money to pay for medication. Even if you do not go to the doctor much, FSA money can be used for other things like dental work or glasses and contact lenses.

As the famous saying goes, prevention is always better than cure. Practicing healthy habits such as staying active every day and eating right will lessen the chance of needing certain medications. Most people need the occasional antibiotic, but conditions such as high blood pressure and diabetes are preventable for the most part. These chronic diseases can be debilitating to your well-being and your wallet. Health can be an asset, just like any bank account you may have. If you don’t take care of it, you will definitely be paying for it down the road. Hopefully some of these tips will help ease the financial burden!

Holiday CHEER: Giving Feels Good!

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The holidays are almost here and it's a great time to think about giving to others. Maybe you're in debt like me, and think that giving is pretty difficult when every bit counts.

The holidays are almost here and it’s a great time to think about giving to others. Maybe you’re in debt like me, and think that giving is pretty difficult when every bit counts. Can’t blame you! But today I want to share an opportunity that really means a lot to me: the education of students in public school.

My good friend from college has been working in Harlem as a teacher to an underserved population. These students are in need of basic necessities and safety that we may rarely think about. Here’s a little information from Kelsey:

We are located on the fourth floor of an educational complex that has three other schools in it. We have three hallways and 450 students. Quite often we have to run around at the beginning of class to make sure there are enough chairs and desks for everyone. Some desks are falling apart and there’s always a need for more writing utensils, paper and office supplies. Most students are on discounted or free lunch but their parents allocate money to make sure they own the school uniform t-shirt and wear it while in class. We don’t have a computer lab and our traveling ones rarely possess a computer that has all its keys. It is absolutely a school in transition under a new principal with high expectations and the staff and students reflect it.

This is the next generation, and they need some help. If you have anything you can give – even just a dollar – head on over here: Supporting ELL and Closing the Achievement Gap In Harlem. Use the code: CHEER to have your donation matched, too!

Thanks for reading,

Sam

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