Category Archives: Financial planning
Tending to and healing the body is a noble profession with roots in ancient Greece. An oath named after Hippocrates, the father of Western medicine, puts forth the principle that physicians should “first, do no harm.” Yet, mistakes in healthcare are so rampant that some have termed the situation a crisis. Of course, medical professionals are human and some mistakes are to be expected, but the high frequency of these potentially devastating, largely preventable errors have created a public health problem that leaves many patients in pain and in debt.
The Institute of Medicine issueda seminal study in 1999 examining the quality of health care in the U.S. Defining medical errors as “the failure of a planned action to be completed as intended or the use of a wrong plan to achieve an aim,” the study estimated that such lapses prove fatal for between 44,000 and 98,000 people every year. That’s more than the annual number of deaths attributable to well-publicized causes like AIDS, motor vehicle accidents, or breast cancer. The researchers also concluded that preventable medical mistakes costbillions of dollars per year, including the expense of additional care necessitated by the errors, lost income and household productivity, and disability.
In 2008, actuaries measured direct medical expenses and determined thatmedical errors annually cost $17.1 billion while the cost of avoidable hospital readmissions added another $13 to $18 billion a year. The study identified more than 1.5 million avoidable errors and found that, on average, the cost per mistake was $11,366. Almost 70 percent of the total medical cost for measurable medical errors was due to ten common errors: pressure ulcers, postoperative infections, postlaminectomy syndrome, hemorrhage complicating a procedure, accidental puncture or laceration during a procedure, mechanical complication of a non-cardiac device, abdominal hernia without mention of obstruction,hematoma complicating a procedure, unspecified adverse effect of a drug, and mechanical complication of a cardiac device.
Another source, the National Practitioner Data Bank (NPDB), lists the five most common categories of malpractice cases as diagnosis, treatment, surgery, medication, and obstetrics. According to the NPDB, the responsibility for these incidents is spread among many types of practitioners. From 2004 to 2014, over 270,300 malpractice claims were brought against nurses and 182,095 were brought against physicians. Dental professionals, therapeutic practitioners, and technicians and assistants saw the third, fourth, and fifth highest numbers of claims. There is no federal law that requires hospitals to report medical errors; and although 27 states do mandate such reporting, the data is rife with inaccuracies and is not uniformly collected.
Healthcare providers that make a mistake rarely bear the resulting financial obligations. Instead,when treatment makes a patient’s health worse, he or she is also expected to foot the bill for the avoidable error. Taking on debt when the need for further care was preventable is to add insult to literal and figurative injury. And the outlook is grim: medical bills are a common reason for personal bankruptcy filings. According to a 2013 analysis, 1.7 million Americans live in households that will declare bankruptcy due to inability to pay medical bills. Of adults ages 19 to 64:
- 56 million will have trouble paying medical bills.
- Over 35 million will be hear from collection agencies seeking payment for medical bills.
- High medical bills will cause almost 17 million to receive a lower credit rating.
- More than 15 million will empty their savings to pay medical bills.
- Over 11 million will run up credit card debt in order to pay hospital bills.
- Nearly 10 million will be unable to pay for basic necessities such as food and rent because of medical bills.
A 2016 look at healthcare found that 26 percent of U.S. adults have experienced serious financial problems due to health care costs. Of that number, large medical bills caused 42 percent to spend most or all of their personal savings, 23 percent to take on credit card debt that might be hard to pay off, 19 percent to take out a loan, and 7 percent to declare bankruptcy.
Although the Affordable Care Act (also known as Obamacare) has reduced the number of uninsured, high-deductible plans requiring more out-of-pocket costs can quickly cause debt to add up. An average family of four with an employer-sponsored “preferred provider plan” is currently estimated to have healthcare costs of $25,826, which has more than tripled since 2001’s figure of $8,414. Now responsible for 43 percent, employees carry four percent more of the cost than they did 15 years ago. Some of these increases can be traced to insurance companies’ passing the buck on to the consumer, raising rates to counteract increased claims for medical errors.
When medical treatment goes wrong, it can set off a chain of events that harms the patient beyond the physical toll. Consequences from medical mistreatment can easily lead to job loss due to the patient’s being physically or emotionally unable to continue life as it was prior to the error. Loss of employment is often coupled with loss of health insurance, which then leaves the patient unable to afford medical care. When the bills multiply and income is limited, many people turn to credit cards, not realizing how quickly this option can cause a bad situation to become a hopeless one. Drawn in by balance transfers, limited time low interest rates, or interest-only payments as well as minimum payments, credit card debt can mount fast and furiously. Interest, late fees, and penalties for being overdrawn can even surpass the original debt.
In cases where negligence can be proven, a medical malpractice lawsuit may be feasible. If you believe you have been a victim of medical malpractice, it’s important to talk with a malpractice attorney in your state. Ininstances where legal action is not viable, the patient’s financial fallout from paying the extra costs may be best dealt with by filing for bankruptcy protection. Chapter 7 and Chapter 13 of the United States Bankruptcy Code consider both medical debt and credit card debt to be unsecured, meaning such debt is eligible for dismissal in the right circumstances. Many bankruptcy attorneys offer free initial consultations, so it’s often worth the time to talk to a lawyer who can evaluate your personal situation.
About: Mike Stephenson is a medical malpractice attorney in Indianapolis who has been representing clients in the central Indiana for more than 2 decades. Mike is a partner at McNeely Stephenson, Attorneys at Law which specializes in personal injury lawsuits.
1) Paying yourself every week : – this is perhaps one of the best way to start budgeting for yourself. You can do that on a weekly or a daily basis. Keep aside $25-$50 or any amount of your choice and put that in a safe place. This is an amount that you are trying to save from your budget and use it later. So you won’t touch this money unless or until there is some serious emergency and you are in dire need of money. This kind of saving money will also help to minimize or eliminate your impulsive spending habits. By saving $50 every week, you can actually save $200 in a month and $4800 in two years. Of course this is not including the interest, but still this is a good money-saving opportunity.
2) Minimize your shopping habits : – people who love shopping very frequently can actually save a lot of money every year if they minimize their shopping habits. Before you spend money on anything, you must ask yourself first whether you really need it or not. Many a times, people buy things that is actually not required urgently, and therefore it leads to wasteful spending. One pair of jeans, a sweater and one pair of shirts can be enough for a few months, so just buy what you absolutely need and pass on those items that aren’t necessary.
3) Use your bank’s own ATMs : – it is always recommended to withdraw money from your own bank’s ATM machines. Whenever you withdraw money from other bank’s ATMs, they will charge you a fee. This can build up to a good amount in a year, just in fees, which can be easily saved.
4) Keep an eye on your spending : – it is a good idea to track your spendings on a daily basis. Write down every single dollar you spend. This will give you a “birds-eye” view and see where your money is exactly spent on a regular basis. You can refine your spending habits seeing this list and essentially save more money from your regular expenses.
5) Keeping your credit card balances to the lowest : – On an average, most of the credit card companies charge 15% – %20 in interests and fees, if the outstanding balance is not paid in full every month. Therefore it is important to pay off those pesky credit card dues as soon as possible.
6) Using your debit cards regularly instead of the credit cards : – Get in the habit of using your debit card rather than using your credit cards. Debit card is linked with your checking account, so whenever you make any purchase, you are sure of having that money in your checking account. Using a credit card can be quite expensive if you are not able to pay the full amount within the due date.
7) Rolling over the 401K when you are in between jobs : – Whenever people are changing jobs, they will be in a situation whether to roll over their retirement funds or to withdraw it since it is a good substantial amount. It is always suggested not to withdraw the retirement funds because it is that money that can be used in your old age. Moreover you will have to pay fines and penalties for an early withdrawal and it will take away almost 40%-60% of your savings. This is like giving your hard earned money to a stranger for nothing.
8) Avoid getting too many credit cards : – People having multiple credit cards and if they are not able to pay the amount in full are getting charged in more interests and fees by different banks. A person having just one credit card is in a much better situation than another person who is having 5 or 6 credit cards because he is paying more money in interests and fees. It is good to have one or two credit cards because it will help you to build credit and used during emergencies, if these credit cards are managed properly.
9) Checking your credit report at regular intervals : – it is always recommended to check your credit report once in six months. In many cases, credit bureaus are reporting inaccurate negative information on consumer’s credit report. This can often hurt your credit scores. If you find any inaccurate information on your credit report, get it solved with the credit bureaus to improve your credit ratings. Many a times, people are not aware about the unsettled accounts, or accounts that are still open/active when they should be closed. Pay attention to these items when you are checking your report.
The job of managing your personal finances can be time-consuming. You need to have some basic knowledge about finances, and review your situation periodically. If you make poor financial decisions, it can take years to recover from your mistakes. Use these tips from successful corporations to manage your finances.
Creating a cash reserve
Ideally, everyone should create a monthly budget. That budget should include a line item for savings. Everyone needs a cash reserve. The extra cash you accumulate can help you cover an unexpected expense.
Mohawk is an example of a company that maintains a good cash reserve. In business, the cash reserve can cover an expense or be used to take advantage of an opportunity.
When you create a budget, you can use whatever system works for you. It’s critical, however, that you put budget in writing. If you can look at a piece of paper or on a computer screen and see your budget, chances are you’ll make the effort to stick with it.
Create categories for each type of spending. You should label each spending category as either fixed or variable. Say, for example, that your monthly income is $4,000 after tax. You have fixed expenses (home loan, car payments) of $3,000 and variable costs (food, gas, entertainment) of $1,000.
Assume you want to save $150 per month. If you need to cut expenses to generate savings, review your variable expenses first. Maybe you can cut down on dining out and come up with the $150.
Diversify your investments
When your savings balance gets large enough, you may consider investing some of those dollars. When people consider investments, they normally think of stock and bonds.
Hamad Darwish Al Masah Capital explains that investors can now consider alternative investments. Alternative investments include real estate, commodities and other less traditional securities.
The important point is to diversify your holdings. If you diversify, you won’t be hugely affected by any single change in the investment markets.
Maintaining good credit
If you have a good credit rating, manage your borrowing so you keep that high rating. Make sure that you can afford the monthly principal and interest payments on any debt you incur. Ensure that your payments are on time, and that your credit report is accurate.
A high credit rating also provides advantages to a corporation. Standard and Poor’s (S&P) rates the creditworthiness of businesses. The highest S&P rating is AAA. USA Today reports that only three US companies had a AAA credit rating in 2014.
Both individuals and companies with a high credit rating can borrow at lower interest rates. This reduces the cost of borrowing and makes loan repayment easier.
Sometimes, a business cannot borrow through a traditional bank. The interest rate on the bank loan may be much higher than the company wants to pay. Hamad Darwish of Al Masah Capital points out that investment firms can help companies raise capital through a loan or buy issuing stock.
Individuals also have choices if they cannot get a loan from a bank or credit union. Borrowers can find a company that specializes in loans to people with poor credit. You can get the financing you need, if you’ll willing to pay a higher interest rate.
Use these tips to monitor your personal finances. If you’re willing to invest some time and effort, you can improve your financial situation.
Every parent wants their children to get the best education possible and be successful in life. However, life is uncertain and the path to fulfilling all your desires may be a convoluted one. Hence you need to implement a sound investment strategy. With proper planning and a variety of investment options, your child will have a good journey to a valuable college degree. Follow these tips for an efficient planning for growing children.
1) Creating a financial plan and know where to end: When you are planning for your children’s education, work out an estimate of all the costs involved. Keep this estimate as a guide and start piercing together your investment plan. You will see a variety of education planning options each with its own risks and benefits and you will use it accordingly to achieve your goals.
- a. To get started, make an education saving plan in the early days. You will have money available when your child enters college. These education savings plan come with different protection benefits to the child and the parent.
- b. If you have property, it will provide rent and capital appreciation and this can be used in your child’s education. Rent money can be used to pay for your child’s tuition fees and other related expenses. And when the value of the property increases, it can be sold to obtain capital gains. When you invest your money in the property market, do a thorough research because this market will fluctuate and you may not get the selling price as anticipated.
- c. Unit Trusts and Structured Investments can also be a part of your investment planning.
2) Set up an automatic system to invest regularly: Make an action plan where your savings or investing can be made automatic. Many savings, investment linked plans and unit trust funds can be operated monthly, quarterly, half annually or annually. When you are investing regularly, you will also benefit from Dollar Cost Averaging. It is an average of highs and lows of an investment and lower the total average cost per share of the investment.
3) Reviewing the plan: When you reviewing the plan regularly, you will stay on track with your target goals. Make sure that you review it at least once in a year and with any major change in your life, such as a new child, career advancement or move to a bigger house, find ways to top up if it is not up to the mark in reaching your investment goal.
4) Top up annually or whenever you can: You can always increase your contributions annually or top up your contributions when there is an increase in your income or you get a bonus or increase in your pay. You will be able to meet your target quicker and achieve a large fund.
5) No dipping into the funds: Choose the right plan that will lock your funds for your children’s education until they are ready to go to college. You should not be able to withdraw the fund easily otherwise you will use the money for other emergencies or needs that may come up.
6) Contributions from family members: You can encourage grandparents or other relatives in your family to not to spend money in gifts but opt for a cash contribution towards their education fund instead.
7) Making a team effort: Encourage your children to do savings for their future education. While you are reviewing your investments for their education funds, you can discuss it with them so that they know how hard you are working and putting your efforts towards achieving their goals. If they want to contribute a small portion towards their education fund, appreciate it. And when they are ready to leave for university, make sure that they have learnt good money management habits so that they are able to live within their means.
When you start a home business of your own, you will need to take a lot of responsibilities, because a lot of great opportunities will come your way. You are the only person to look after your business and make wise decisions and keeping a track of your finances.
While there is professional help available to take care of your business finances, but you can also try the different options to take care of it. Whichever option you choose, you will need something to take care of your budget, taxes, receipts etc.
Business bank account: when you start your own home business, you should a separate bank account for doing all the financial transactions related to your business. There is no need to mix your home finances with your business, especially when your business begins to lose money. Many people lose track when they are juggling with their finances from one account.
Your business will always look professional when it has a separate business account. You will have more options and rewards than personal bank accounts.
Finance software: it will be a wise decision to install a computer for your business with a software program. It will keep track of your money, bills, budgets, schedules and more. These programs are very easy to learn and will be very handy when your business starts growing.
There are many programs in the market that can be purchased and installed to get alternative help for your business. They have optimum features to take care of all your services. Before purchasing any program, read the customer reviews to understand which program works the best for specific home businesses, computers and system requirements.
Cash on delivery: in the beginning days, you will have limited employees, and the money collected will be done by your hands. When you receive payments from your customers, make sure that you keep a proper track of it so that you can separate the non-paying customers and other money mix ups.
Home and business budget: it is important that every home budget has a fixed budget. Without a budget, there are chances that you end up spending more than your business can handle. And if you don’t have a separate business account, your business finances will get drained by your home expenses.
Whenever a business starts making loses, many business owners, having no other options, take out money from their personal accounts to cover the losses. This can be a very bad financial decision that will threaten both your business and home. Make sure that you create a solid budget so that you keep a close eye on your money and calculate the losses and gains on a weekly, biweekly or monthly basis.
Every owner is responsible for his own home business from the beginning to the end. And you should have a proper track of your money. A software program can make a lot of things easier for managing your business finances.
In many cases, annuities are used as retirement investment vehicle. They provide the investor with a tax deferred way of calculating interest. There are many types of annuities for different investors with many options, their opportunity for a sizable return, and their safety. Variable annuity is often considered as the riskier annuity. The investor is able to invest the annuity in the stock market, or in mutual funds. Any person over the age of 60 will receive monthly payments, depending on the results of the investments.
If the investor is not 60 years of age, he will still receive the tax benefits, but he won’t get the payment until he reaches 60. Variable Annuity can be for a fixed time period or for life. Most of these annuities offer a money market sub account. This will allow the investor to switch to a secure fixed rate, at any point of time.
Advantages of Annuities :
If you look at the stock exchange market, especially S & P 500 who have an annual return averaging 12%, while historically Fixed Annuities, Treasury Bills, and secure Bonds usually offer single-digit interest rates. A Variable Annuity will allow you to earn much higher returns.
All annuities are tax deferred, and it will be beneficial for many investors over other investment vehicles. It will provide you inheritance probate-free, thereby allowing your loved ones to avoid estate taxes. You can also provide gifts which are completely free of tax up to $10k per year, per person.
Fixed annuities do not provide such higher liquidity like variable annuities. You can make withdrawals as much as 10% annually in the first year without any sort of penalty. And if there is any market change and you are not feeling confident about it, you can move to a fixed rate of interest, providing a very secure investment vehicle. Based on the current market conditions, you can change you risk/return.
Disadvantages of Annuities:
Variable Annuities are not that secure like Fixed annuities or CD’s. When you put your money in the market, it means that you are willing to risk your share. There are some management fees, just like a mutual fund. You must check the commissions or the fees involved.
This investment will give you enough liquidity, but it is not the right one if you need that money tomorrow. Income withdrawals before the age of 59.5 years or by more than the allowable percent per year will result in a 10% IRS penalty.
You must do all your research before putting your money in the market. Overall variable annuities are a good investment vehicle to grow your nest egg tax deferred, but at the same time, there are lots of risks involved. Always seek professional help before making this important decision.
When it comes to financial planning, many people make this common mistake of ignoring it completely and it keep it aside for so long and it so happens that the real benefits of financial planning expire. It’s important to start planning at the earliest so that you get the real value of your money.
Many people do not want to put their efforts in financial planning because they think that the process of planning will be too lengthy and also they remain unaware about the benefits. A financial planning surrey was done and it was found that many people had the following misconception:-
- They were not able to properly plan their financial goals.
- Take a financial decision without even understanding its effects on other financial issues.
- Many people confuse financial planning with investing.
- They often neglect to re-evaluate their plan periodically.
- Many people think that financial planning is only for wealthy people or for people when they get older.
- Financial planning is often confused with retirement planning.
- They wait till the time when there is a money crisis and then start planning.
- Expecting unrealistic returns on investments.
- Sometimes they think that using a planner means losing control.
- They often think that financial planning is primarily tax planning.
You should always make your money count with a plan. And in order to avoid the mistakes mentioned above, you most focus in a proper way. You can get the best ROI from your financial planning by following these tips.
Start planning as soon as you can: It is not worth to delay your financial planning. People who start to invest at an early age will get more benefits than others who wait until later in life and do retirement planning surrey. When you have developed good financial habits like saving, budgeting, investing and regularly reviewing your finances early in life, you will be able to handle the challenges in life in a better way.
Be realistic in your expectations: Proper planning of your finances will help you reach your goals quicker in life. However there will be some events that will be beyond your control such as inflation or fluctuations in the stock market or interest rates. So it is important to be prepared.
Setting up your financial goals: You must set your targets that you want to achieve and when you want to achieve them.
Taking charge: When you are working with a financial planner, make sure that you understand the financial planning process and how your money will give you the returns. The planner will require all your information about your financial situation and your purpose. Get all your questions answered and play an active role in decision making.
Re-evaluating your financial situation regularly: Financial planning is a dynamic process. Your financial goals may change over the period of time due to changes in your lifestyle such as marriage, inheritance, birth, house purchase or change of job status. Always revise your financial plans periodically so that you can stay on track with your long term goals.