Some Blog Site

It is the end of May, and I have not received my economic stimulus tax rebate check. According to what the IRS said, I should have received my money a few weeks ago. But I did, last week, receive a letter from the IRS saying that I will get some money. Not the money itself, just a letter describing the money.

Lewis Black had a comedy routine about this the last time there was an economic stimulus rebate thingy (around 2001). And I have to agree with him. Why not, instead of mailing people letters telling them they’re going to receive checks, just put the checks in the letters? That would save people some annoyance and save the government some money. How much money? It cost the IRS $42 million to send letters without checks in them.

“For because of this you also pay taxes, for rulers are servants of God, devoting themselves to this very thing.”
– Romans 13:6

 I have switched things around slightly.  Now the financial calulators have their own page, for better organization and cleaner names. 

“Therefore, COME OUT FROM THEIR MIDST AND BE SEPARATE,” says the Lord. “AND DO NOT TOUCH WHAT IS UNCLEAN; And I will welcome you.”
 – 2 Corinthians 6:17

The best way to get rid of debt is to pay it off. Another way to pay it off faster, other than rounding a payment up to the nearest hundreds, is to participate in a bi-weekly payment schedule instead of the normal monthly payment schedule.

To see the effects of paying 26 half payments instead of 12 full payments, try the bi-weekly payment calculator, which I added to this site today.

“So we built the wall and the whole wall was joined together to half its {height,} for the people had a mind to work.”
– Nehemiah 4:6

The best way to get rid of debt is to pay it off. The best way I’ve found to pay it off faster is to round up your payments to a nice number. In my case, I round to the next hundreds place, but you could round to the next tens place or thousands place, depending on your situation.

To see the effects of paying more than the minimum amount each month, try the loan acceleration calculator, which I added to this site this past weekend.

“Whoever forces you to go one mile, go with him two.”
– Matthew 5:41

Recent news articles have mentioned that recent stock prices have been volatile. Or you’ll hear about the stock market’s being volatile. I always understood that to mean that the prices changed rapidly.

One example of that is Virgin Mobile (ticker symbol VM). I bought that stock upon a recommendation from a previously reliable person. I bought at $5.something on 3/27/08 and the stock is now at $2.13 (4/3/08) . Now that I have owned VM, I recall hearing my high school chemistry teacher tell me that volatile means “evaporates readily.” And that is a fitting description of my VM stock.

“Yet you do not know what your life will be like tomorrow. You are just a vapor that appears for a little while and then vanishes away.”
– James 4:14

The Health Savings Plans (HSAs) that have recently become popular (because they only recently were passed into law) do have some problems. Maybe not problems…more like things that steepen the learning curve. These are some differences from the traditional HMO/PPO that people should know.

The plan (or insurance company or provider or etc.) does not pay for anything anymore. You pay. Under traditional plans, you would have some medical treatment or pick up a prescription and pay either nothing or a small co-pay. The medical service provider would then bill the insurance company who would then pay it. The insurance company may or may not have let you know what the cost was, and you may or may not have had to pay a portion of it.

Now, with an HSA, the medical service provider bills the insurance company, which tells the service provider to bill you for the service. You get a bill for the full amount and are responsible to send them a check or use your HSA-provided debit card to pay for items that need to be paid at time of service. All the insurance company does is track your expenses and negotiate lower rates for you. After a certain point though (“the bridge”), the insurance company does start acting more like a traditional insurance company.

Before, with a traditional plan, if it said that you had coverage, you had that coverage from day one. Now, with an HSA, you have coverage but the money in your plan is not there right away. For example, if your company’s plan states that you will have $1600 of coverage from your pre-tax contributions for the year, you do not get $1600 at the start of the year. The company can divide it and give you only $400 per quarter.

I think that is the real draw for company’s to push HSAs for their employees – it helps manage their cash flow. If employees have significant health-care charges early in the year, now the employee is responsible for the difference. You have $750 of medical expenses but only $400 in the account, then you pay the extra $350 out of your pocket. You can reimburse yourself from the account once it gets the next installment, such as the next quarter. But the employee is now handling the float. The company’s cash flow is more even and the burden of what is effectively a small loan is passed to the employee.

“if he does not lend {money} on interest or take increase, {if} he keeps his hand from iniquity {and} executes true justice between man and man, {if} he walks in My statutes and My ordinances so as to deal faithfully– he is righteous {and} will surely live,” declares the Lord GOD.”
– Ezekiel 18:8-9

Not too long ago, I posted this article about someone’s trying to convince me that it would be to my advantage to reduce my 401k contributions and increase my Roth IRA contributions by the same amount. Since then, I have put together a handy-dandy online calculator to compare the scenario for me.  You can click the link in that previous sentence or use the link in the sidebar to the right, under the Pages category.

The goal of the calculator was to show that there is really no difference to me. And it does show that. The amount I have at retirement is the same regardless of the mixture. I will pay slightly more in taxes in the one case, but it does not affect my bottom line.  The key is that in having more in the pre-tax 401k, I will have more take-home pay, which means that I can contribute that extra to a Roth.  Feel free to put various scenarios and situations into the calculator and see how much the mixture of 401(k) and Roth matters.

The real problem with reducing my 401k contribution is that I know I will not be as diligent in saving the money for a Roth IRA as I am with the 401k, since the 401k is done automatically by payroll before I ever see the money.

“Behold, I send you out as sheep in the midst of wolves; so be shrewd as serpents and innocent as doves.”
– Matthew 10:16