Beating Broke

Personal Finance from the Broke Perspective

My Wife Quit Her Job: End of Year Update

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Last update, I told you that the COBRA health insurance plan premium went through the roof and we were deciding whether to continue paying for it, or to switch over to the plan that I get at work.  In the end, we decided to remain on the COBRA plan.  The difference was about $350 a month, but we figured that if we had only one or two medical mishaps, it would easily pay for itself with the 100% coverage.  And, as luck would have it, it turned out to be a good idea.  Both my wife and I ended up having issues that required several weeks of physical therapy.  Hers stems from an accident she had a few years back that seems to have thrown a few things off.  Nothing some pt and a pair of orthotics won’t fix.  Mine is from my football days.  Arguably, not completely necessary, but was something that would need to be fixed one way or the other, so decided to get it taken care of.  Then, to make our decision look even smarter, my wife fell in the ice and snow yesterday and severely sprained her ankle and knee and prompted a visit to the ER.  We got a nice new pair of crutches and what will likely be a very expensive pair of athletic wraps.  Of course, all paid for by our insurance.  The extra money has easily paid for itself.  But, that all ends on the 1st, so we’re switching back to the coverage that I get at work.

The business that my wife and her friends started continues to do well.  They received a very important certification from the state that will allow them to pick up another line of business and expand even further.  My wife continues to be the only one getting a regular paycheck from the company, but with this new certification, that will likely change very soon.  Luckily, the people that she’s working with are both very qualified for the business that they are in and have plenty of experience (my wife does to) so they don’t have much in the way of learning curves for the actual service that they provide.  Their biggest learning curve has been the actual running of the business.  They were smart and got a lawyer and an accountant right away though, so they’ve had excellent guidance along the way.

Also, I did receive a small raise this year which should help.  However, between the insurance and some increases in medical flex and childcare flex, my checks will likely be smaller than they were in 2009.  Most of that should come back through the flex accounts.  Tax free money for the win.  Especially on things like childcare that you’re going to spend money on anyways!

My Wife Quit Her Job: The Hits Keep On Rolling

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It would appear that the saga is far from over.  (If you want the full story, you can read part 1 of My Wife Quit Her Job) Just when you think you can’t handle any more of a challenge, a little more gets thrown on top.  Obviously, God knows we can handle more.

Since my wife quit her job, we’ve been paying for Cobra health insurance to continue with the coverage that we had.  It was a bit of an increase since you pay for the company portion as well as what you would have normally paid, but we had already met our deductible and it pays 100% after that.  That full coverage bit helped us justify the extra couple of hundred that we had to pay each month.  But earlier this week, we got a letter from my wife’s former employer that informed us that the cost of the insurance would be going up and that beginning on the 1st of September we would have to pay that.

I probably don’t have to tell you that the increase puts an even deeper kink in our financial situation.  We may have to lose the 100% coverage in exchange for the plan that I get from work.  It’s only marginally cheaper than the original Cobra price, but even more so now that we’ve been hit with this increase.  The only part I haven’t worked out is if we would be better off keeping the Cobra coverage until the end of the year.  Any new deductible that we might have to meet may offset any extra premiums that we would have to pay.  Decisions, Decisions.

On a brighter note, the business that my wife and her friends started is still doing well.  She’s even expecting to get her first paycheck from the new company this month!  Certainly not a full paycheck, but getting closer.

Do You Shop Your Insurance?

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My wife and I are thinking of selling our house and buying something a bit bigger.  The house we are in is a little small for our expanding family.  It could be done, but not very comfortably.  In that process, we started our research by visiting with a loan officer to run some numbers and make sure that we were shopping in a price range that we could afford.

One of the subjects that came up in the process is the subject of home owners insurance.  As we discussed it, I mentioned what we were currently paying.  And then the discussion really started.  Turns out, our loan officer thinks that we are over paying by quite a bit.  By about 40% if the loan officer is even close to correct.  Ouch.

When we bought our house, the insurance was the last thing on my mind.  When the day came to sign all the paperwork, the loan officer that we were using at the time (not the same one we saw the other day) asked for the proof of insurance.  Which I did not have, because I had not gotten the insurance yet.  I didn’t see the purpose in insuring a house that I didn’t technically own yet.  I was wrong.  I couldn’t take ownership without proof of insurance.  Two very quick trips to the insurance agent that has our car insurance account later, I had my home owners insurance, and was able to sign the paperwork and take ownership.

In my haste, I took what I could get and what the agent suggested.  Because our house loan has an escrow account, I never really see the bill for the insurance.  It never really got brought up, and it just continued on it’s merry way.  I fell prey to a common personal financial mistake.  I didn’t shop around.  And I didn’t revisit my policies to check for pricing and coverage.

Committing that mistake may only be costing me a few hundred dollars a year.  I say only, because it could certainly be much worse.  Now, as we begin shopping for a new house, we’ll also be shopping for insurance.  Depending on what we find, we may be changing agents.  We may even change agents for the auto coverage as well since we’ll be shopping that around as well.  It doesn’t hurt to look, right?

I know I’m not the only one to ever fall victim to this error.  If you’d like to share your story, you can in the comments below.