In this edition of Bank of Dad, our columnist tackles a common money throw down and how to handle paying back large medical bills.
My husband and I fight about money all the time. I’m more of the penny-pinching for retirement and vacation type; he’s someone who like meals and nice furniture and doesn’t like to squirrel away. How do we learn to see eye-to-eye financially? — Juliana R., Albuquerque, NM
What you’re going through is more common than you might think. Financial disagreements aren’t the exception in marriages – they’re more like the rule. It’s why money is consistently one of the top reasons that couples call it quits.
It doesn’t have to be that way. With the right approach, hopefully you can grow in your understanding of each other’s needs and strengthen your relationship in the process. What you don’t want to do is simply assert the superiority of your viewpoint, says Ryan Howes, a psychologist in Pasadena, California. “Like many things, there’s no right or wrong here, just personal preferences and comfort levels,” he says.
It might be these very differences that actually drew you together in the first place. Savers tend to be fascinated by people with a more carefree attitude, says Howes. And deep down, the spend-thrift may find comfort in the cold rationale of the penny-pincher. Of course, you still need to make certain adjustments once you merge your lives with that person.
To resolve these differences in a meaningful way, you really have to understand what’s driving your respective money habits. For spenders, money is about cutting loose and enjoying the fruits of their labor. But for a saver like yourself, money is more about bringing safety and stability.
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Just as you need to understand where he’s coming from, he needs to see why cutting back means so much to you. Tell him exactly what it is that worries you about his free-wheeling approach to finances — that it makes you anxious about your future well-being.
“When they see that it’s not just about spending or saving, but it’s about deeper wants, like a wish for security or freedom, that usually clicks for them and becomes something they understand instead of argue about,” adds Howes.
Once you understand that you’re seeing things from two fundamentally different vantage points, you might find it easier to address specific spending habits. Look for a compromise solution. If you need a new piece of furniture, says Howe, you might suggest letting him pick out the main features, while you offer to comparison shop and find the best deal.
Here’s another idea. You mentioned that he likes eating out on a regular basis. How about offering to go out for a nice (if not extravagant) dinner twice a month, and using the leftover funds to set up weekly transfers into your savings account? When you don’t have as many of them, you might find that your evenings out together mean even more.
My wife had major surgery recently. She’s fine, thank God, but now we’re looking at 20 years of bills. What are our options to get out of this life-long debt? — Reid L., Dublin, OH
Having a loved one go under the knife is emotionally grueling in its own right. It’s a sad commentary on the American healthcare system that many of us face an avalanche of medical bills, to boot.
Opening up the mail and seeing one egregiously high balance after another can be a shocking experience, no doubt. As difficult as it sounds, staying calm is the key. It’s not a problem you’re going to completely resolve today or even tomorrow. As long as you can formulate a game plan, however, you’ll be fine.
The first thing to do is check that you’re not being overcharged for anything, which is never a given. Unfortunately, medical bills are seemingly written with the express goal of confusing the crap out of patients. Ask for an itemized bill and go through it with a fine-toothed comb. If there are any charges that aren’t crystal clear — or seem like outright errors — call the billing department and get clarification.
You didn’t mention if you’re completely uninsured, or simply have cut-rate plan. If it’s the latter, you’ll want to bone up on the details of your policy. If the insurer didn’t cover your wife’s procedure, or mistakenly made a lower, out-of-network reimbursement to the hospital or surgical practice, you’ll absolutely want to file a dispute.
And if you’re completely uninsured, you might check to see if you’re available for retroactive Medicaid coverage. Under the program’s rules, patients can submit claims for up to three months before they apply, as long as they would have met eligibility requirements during that period. Ohio is one of the states that’s expanded its coverage under the program, although your income still has to fall below 138 percent of the federal poverty line. It’s a long shot, but if one of you is unemployed or went back to school recently, you might just make it in.
Another tactic you might employ is researching your hospital’s and physician’s charity care policy – if they have one – to see if you qualify for relief. Some will offer a break if you’re completely uninsured and meet certain income requirements. Others may offer a discount even if you have insurance, as long as you can show that you face significant out-of-pocket expenses.
Don’t get discouraged if, after trying the above, you’re still left with a mountain of debt. If you call the billing team, you might be able to work out a payment agreement that breaks your bill into manageable amounts each month. But you do need to be proactive; if you simply make little payments without a formal agreement in place, they could end up throwing your bill in collections — and that’s like putting a sledgehammer to your credit score.
I’d caution against putting your balance onto a pricy credit card or even one of the healthcare-focused credit products that hospitals like to offer. Often, these lenders tout a zero percent APR, but jack their rate up to 20 percent or more if you miss a payment. It may seem like a nice, quick fix, but you could end up making your debt problem even worse in the process.
While it’s never the perfect solution, a better idea might be taking a hardship withdrawal or loan from your workplace retirement account (if your employer offers it). The term “loan” is a bit of a misnomer. You pay back whatever you owe, plus a relatively small amount of interest. But the interest you’re paying actually goes back into your account, so the end result of the loan can actually make more money for your retirement, not less
There are some downsides to this approach, to be sure. You can’t make plan contributions while your loan is outstanding, which means you’re losing out on potential investment returns. And if you leave your job for any reason, the full balance has to be paid back in full. But when you consider the alternative – sky-high interest rates on an actual loan – it starts to look more appealing.
Don’t worry, you’ll get this figured out. In the meantime, I hope your wife is focusing on her recovery, and letting you handle all the financial unpleasantness.
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