I just finished the open enrollment process at work. I have been putting it off because I know there have been lots of problems with health insurance as a result of all the changes brought about by Obamacare. I am incredibly thankful to have a job and have health insurance with it, but my take home pay will definitely be going down as a result of everything. So, my wife and I will have to look carefully at the budget and try to decrease our spending levels.
As a result, less waitresses will be getting tips since we will have to eat out less and eat at home more. We have been doing some of this since I broke my arm and couldn’t work for a month anyway, but we will intentionally refocus our efforts to cut costs.
Health Insurance Premiums Going UP
Thankfully, health insurance isn’t the only line item in our budget, but we are seeing an incredible increase in the cost for 2014 compared to 2013. Our out of pocket costs will be going up by 18.2% in 2014! And that is after my employer is supporting a 7.5% increase!
That means that our family health insurance premiums for 2014 are increasing by 25.7%!!!
Ouch and double ouch.
Hopefully no other items in the budget go up by that much in 2014. If gasoline, which is currently at $3.25 per gallon where I live, the cost would be $4.08 per gallon. I think I might have seen prices about that during the summer so it is entirely possible.
What if food were to go up by that much? Then a gallon of milk would be approaching $4 per gallon which could conceivably happen. Dang, I am getting a little depressed. I guess the budget will have to be squeezed quite a bit in 2014 in order to withstand the potential price hikes.
I haven’t set goals for 2014 yet, but I have mentally been thinking that I would like to shave expenses by about 5% next year. This would be through a combination of spending less on discretionary items and avoiding additional debt so that as a few debts get paid off, the costs remain eliminated from overall spending.
I plan on sitting down at the end of the year, seeing what the expenses are and then cutting from there. I have a feeling that the costs for health insurance are only going to get worse for the next few years.
So, what impact has Obamacare had on you?
I just paid my least favorite bill yesterday. It is a bill that arrives quarterly and without fail. It is almost as much as my house payment, and would be more if I didn’t escrow real estate taxes and insurance. I am talking about my quarterly payments for life and disability insurance.
Now I do realize that I have to have the insurance since I am young enough with 5 kids still living at home. And the good news is that I do have adequate insurance should I die. It would be a struggle if I become disabled, but I am working on trimming down my monthly expenses so that I might be able to get by on less.
Nevertheless, I hate having to pay that much money every 3 months for something I hope to never actually use. This provides me with another good reason to get out of debt and be able to achieve financial freedom so that I don’t have to spend so much money on life insurance and disability insurance.
Three Year Plan
In July, I took the time to segregate my debts and pull out all of the consumer debts that I would like to get paid off in 3 years. I did this because it seemed rather convenient to look at the credit card statements for some useful information. You know those boxes that tell you if you pay the minimum it will take you 47 years to pay off the balance, but by paying a little bit more, you can pay it off in 36 months. That is the information that I put together in a spread sheet.
Well, now it is time to start doing something about it. Why? Because a third of my budget is going to these credit card, auto loan, and tax debts. Imagine the extra money that I would have each month if I could simply pay this crap off. Plus, the interest rate is high on some of this debt also. The auto loans are at zero percent, so I won’t be paying those off early, but getting the credit cards taken care of is becoming a very high priority. At the end of the three years, I would still have mortgages and student loans to pay off, but the low interest rate is not near as painful.
In fact, I have even thought about starting another blog solely for the purpose of keeping me motivated and on track. A little online accountability can go a long way. Not sure if I will be doing that, but the thought did cross my mind.
The Ultimate Goal
Ultimately, I would like to be able to get rid of my life insurance and disability policy because I am financially free and making some passive income. If you have no debts and income producing assets, then you really wouldn’t need to have those types of policies. Then I could get rid of my least favorite bill.
Readers, what would you do if you had all your debt paid off?
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