Saving Money on Mortgage Insurance (PMI)

Posted on July 7, 2009 by Jessica

A few years ago my husband and I purchased our first house–the little condominium that we still live in. When we purchased it in March of 2004, it felt like a palace. Now it’s feeling more like a dollhouse, but we still love it.

We purchased this place when real estate values were quite depressed, and interest rates were low, enabling us to purchase when it otherwise may have taken us years.

We purchased our house on a zero-down loan, and then real estate took off. Our little condo doubled its value in two years, so we went into cost-cutting action!

I wrote a letter to our mortgage company and told them since the value of the house has increased, they should adjust the loan to value calculation accordingly.

(I even included a couple of real estate fliers for similar places in the neighborhood showing the increased value).

Two months later I received a letter back saying that after researching comparable properties, they do believe that the property’s loan-to-value ratio can be adjusted giving us the needed “instant equity” to drop our PMI payment of $157 per month.

If you’re still paying PMI, here’s how to try to get the amount eliminated:

1. Write even if you haven’t experienced appreciation but you’ve paid on time every month for two years from the origination of the most recent loan).
2. Write if you have experienced equity appreciation (property values have risen).
3. Write if you have at least 20% equity in your loan.
4. If you’ve made substantial property improvements that might increase the property’s value in an appraisal.

If you are able to have your PMI cancelled, you may also get a refund of PMI from your escrow account. Good luck, and happy saving!

Saving Money on Medical Needs

Posted on June 16, 2009 by Jessica

I don’t know about you, but medical bills have been hitting our house like no body’s business! I honestly can’t believe the rate they’re flocking in right now despite our relatively good health, and decent health insurance.

An ear infection here, a broken tooth there, and routine prescriptions are a truly massive part of our monthly budget.

Here are my tips for reining in your medical costs.
1. HAVE Insurance. Find a way. Consider groups that you could join that would allow you to access medical insurance, but just because you have medical insurance doesn’t mean you shouldn’t ask your provider if a cash price would be lower than your actual deductible. Investigate this possibility. I was surprised to receive a bill for insurance for my $80 co-pay for an outer-ear infection (a scratch on my ear that needed an antibiotic to heal). The cash price for the visit since it was just 3 minutes would have been $30. I said a bad word.

2. Understand your policy. Completely. Deductibles, co-pay, in-network and out. Use in-network when you can. Here’s a great resource for the National Endowment for Financial Education.

3. Use a health savings account or cafeteria plan if it’s available to you. These can save a bundle and be used to pay for all kinds of things!

4 Rx Tips are their own little post I think but I can sum it up below:

a: get a discount card. AAA has a great one, Rite-Aid and Walmart and Target all have cards/programs, but don’t give up on a quality pharmacist who’s going to check your meds vs your allergies and contradictions.
b. Use generics when you can.
c. Ask your doc for samples if you’re starting a new medication, esp for long term use. I had a doc give me antibiotic samples recently, which was wonderful, as it turned out I was allergic. I’m sure glad I didn’t buy a month’s supply!
d. There are many prescription assistance programs, including the Partnership for Prescription Assistance which you may be able to turn to depending on your condition.

5. Dental care: if you don’t have dental insurance, you should still get your cleanings–this little expense may save you a lot in expensive repairs later. You can do this at a dental school, but pack your patience. I have had this done once (in college) and got my teeth cleaned just before graduation for $15. What a steal! It took two hours though, and the hygienist in training used a purple dye, which she cleaned off. Simple enough, but as sweet as this lady was, she was extraordinarily clumsy, and dropped the dye–on my nose. The purple dye was guest of honor at graduation, but my teeth continue to serve me well and I’ve still never had a cavity.

6. Perfect time for a segue–preventative care will save you a bundle. When you have insurance, its usually covered. Get those annual exams, the tests, mammograms, paps, and shots. You need them and early detection will save you a fortune and provide peace of mind.

7. When was the last time you had an eye exam? I recently found this great source for Rx Glasses. I always have three pairs, which costs a pretty penny–so next time, I’m giving this site a try: http://www.clearlylenz.com/ They advertise a full set of glasses for $36, but you do need to have your Rx information.

8. If possible, use a nurse hot line, emergency appt at your regular doc or a urgent care center before opting for emergency room care. Deductibles are very high in the ER, and waits can be very long.

9. Eat out less, drink less alcohol, quit smoking and walk more. Your bottom line (and your bottom) will thank you.

10. If you can’t pay, and medical bills are threatening to push you into bankruptcy –first try negotiating with your provider for a write-off or a lower rate. I’ve working on a review over at ProsperLending Review of a company called “IOUSOS“, which facilitates negotiation and collection of medical debts between patients and providers. The National Endowment for Financial Literacy also offers a manual about managing medical debt here.

Bonus item: Don’t forget to save reciepts on all medical costs for tax time. Some are deductible! (Ask your tax-preparer for more info).

Day 10: Are You Saving Enough?

Posted on April 20, 2009 by Jessica

I’ve been listening to the Audiobook “Total Money Makeover” by Dave Ramsey. This is available from Audible.com, and I highly recommend it. If you want to download the book, I’ve attached a coupon here for two free books.

One tip that Mr. Ramsey offers that I find especially interesting is that to know if you’re saving enough, you need to take the amount you have saved in your nest egg (savings/retirement) and multiply it by .08.

If you can live off the resulting figure, then you’re saving enough. If not, you’d better step it up (after paying off your debts of course).

I was surprised. I consider our savings rather paltry, but we actually *could* live off the results. Granted, we’d cut the cable and be living on rice and beans, but we would only have to cut our household expenses by another $300, which wouldn’t be hard.

What they say in the Total Money Makeover is true–the closer you get, the easier it becomes. We now are on the last of our “snowballs” (only one remaining debt to pay off), and it’s disappearing quickly because every extra resource can be dedicated there.

We haven’t followed one of the guidelines–we haven’t stopped saving. We’re still saving for retirement and for planned major expenses (one daughter’s adoption finalization, etc). If we’d stopped this, we could speed up the process even more.

If you’re just starting your Total Money Makeover, or considering starting the program, don’t loose heart. It goes so much faster than you’d expect. Good luck!

This is part 10 of a 30 part series on financial literacy for the month of April, Financial Literacy Month.

Living great, despite the layoff

Posted on April 2, 2009 by Jessica

We’ve now reached the point (just a few months in) where I’ve completely replaced my previous work-outside-the-home income with my mobile notary business and my freelance writing. By implementing the tips I’ve been outlining here–even post-layoff our family is coming out ahead of where we were six months ago financially, as well as in peace of mind.

Here’s a brief list of what we’ve done so far, and where it’s getting us. Remember, my layoff was December 7th, and today is April 2nd.

Called all lenders and negotiated lower interest rates. Followed up by shredding all credit cards. Value: Priceless!
Learned to cost-cut around the house: home-made laundry detergent. Saves $7/mo.
Budget and track all expenses with Mint.com.
Renegotiated and repriced insurance, dropped the gap coverage on our paid-off/high-mileage cars. Saves $4/mo.
Used the library more. Estimated savings $20/mo
Developed passive income streams (adding advertising on this web site and others, as well as Lending Club interest). Earns $1.10/mo.
Rolled-over my fee-intensive 401K into a more affordable IRA Savings TBD
Found tax advantages to starting my mobile-notary and freelance writing business.
“Re bundled” our cable-TV package to the same service and same company at a lower introductory price. Saves $25/mo.
Received our tax refund and paid off an adoption loan ($150/mo, a credit card $100/mo and a student loan $110/mo). We have just one credit card left. Saves $360/mo in debt payments.
Refinanced our 30-year fixed mortgage, and rolled in our home equity loan ($329/mo). We put both into a 15-year fixed mortgage and will be paying just $89 more than we were paying on our old mortgage payment. (We used Smarthippo.com to find a better rate). Saves $240 per month and 15 years off the life of our mortgage.
Testing out some meat-free recipes for dinner. Last night the kids loved eggplant parmesan (they thought it was pizza!). Saves $24/mo.
Renegotiated cell-phone plan (due to new business). Saves $100/mo.
The layoff reduced our household’s commuting cost. Saves $200/mo in fuel.
These tricks save us $981.10 per month, but we’ve noticed that now that all expenses are tracked, our household expenses have been reduced by about $1300 per month.

Here’s a few things that we’re not doing.

Working more than 45-50 hours per week.
Missing out on time with our kids.
Cutting our daughter’s preschool (we may do this to ‘snowball’ an extra $660 per month, but she’s having so much fun, we’re having her stay for now).
Clipping coupons.
Stuffing envelopes or participating in “get rich quick schemes” and “pyramid sales.”

Saving a few bucks

Posted on March 11, 2009 by Jessica

I called my auto insurance company yesterday (USAA) and updated my info. Both cars are paid off, which means we can remove our “gap insurance” (the insurance that covers the depreciaion on the cars in the event that one is totaled). Also, I upated my milage. Now that I’m working from home, my mileage is cut almost in half per yer. Total savings, $4.00 per month. Snowflake!

Just my $.02 for yesterday.

The Pennywise Family

Category Archives: insurance