Simple Financial Lifestyle

What Is a Health Savings Account?

Guest Post — Mon, 07 Feb 2011 10:00:52 +0000

If you’re young and just starting out in life or a ‘seasoned’ veteran, you have many things in common–one of which is the desire to assure your family is protected in case of emergency. That means insurance coverage…enough to cover you in the event of unexpected trouble. You can’t be too careful. Without insurance the first medical disaster will wipe you out, and it may take years to catch up. In order to protect yourself from possible financial ruin it’s advisable to make sure you’re covered in case of disaster. Of course, that’s not always possible, especially in this economy, and particularly if you’re recently married or out on your own for the first time. Money may be tight. You’ve saved a little for a rainy day, but you know it won’t be enough if something terrible happens. Is there a way to protect yourself and your family’s medical needs? Yes there is. It’s called a health savings account (HSA.)

What Is an HSA?

A health savings account may be just what the doctor ordered…if you meet the requirements. HSAs came into being as part of the Medicare Prescription Drug, Improvement and Modernization Act, commonly called the Medicare Modernization Act (MMA) in 2003. Basically, a health savings account is a bank account you open with your money (your employer may also contribute) and is kept on account for a specific purpose–health care for you and your family. You can add to it at any time and draw on it when needed. There are some terrific advantages to a HSA, but in order to qualify certain conditions must be met.

HSA Advantages

It is more than a simple savings account. Deposits into a health savings account are made with your funds before taxes are deducted. Interest on these savings is tax free, and any money you remove from the account to pay for medical expenses is not taxable. The money in your health savings account continues to draw interest as long as it is in the account. If you move or simply change banks, your HSA goes with you. It’s your money. As long it’s in the account, it continues to work for you.

Most banks will let you use some of the money in your health savings account to invest in stocks, bonds, or mutual funds so that you can make even more off it. If you hold onto your HSA until after you retire, you can also withdraw the funds for non medical purposes without a penalty. Similar to an IRA, health savings account funds may be subject to penalties for early withdrawal if used for a non medical purpose.

Withdrawing money from your health savings account is permissible for a variety of medical reasons ranging from lab fees to surgery, and may include anything that has to do with the diagnosis or treatment of a disease.

Requirements and Limitations

There are certain prerequisites that must be met to qualify for the benefits of a health savings account.

* Enrollment in an insurance plan with a high deductible is required for an HSA. Carrying a High Deductible Health Plan (HDHP) usually means making lower monthly payments, which is another advantage for having the HSA. There is, however, a caveat–you aren’t allowed to carry an additional medical plan that doesn’t include a high deductible.
* You must not be eligible to receive Medicare benefits, and you can’t be claimed as a dependent on anyone else’s tax return.
* You must not have received benefits from the VA during the previous three months, nor can you be eligible for Tricare, which is an insurance program for military veterans.
* There may be limitations as to the amount that can be placed in a HSA in any given year.
* You take the risk of the necessity of remaining in relatively good health while your HSA grows. In the beginning there won’t be a lot in the account, but your savings will grow if the money remains untouched.

Do Your Homework

Before jumping into a health savings account, weigh the risks against the rewards. You may discover that having a HSA is worth it. Everyone’s needs are different. A health savings account may not be for you, but the only way to find out is to study all the pros and cons and make an educated choice.

Guest post from Bailey Harris. Bailey writes for the Health Insurance Blog.

Reduce Financial Stress, Simplify Your Personal Finances

Connor Groening — Tue, 04 Jan 2011 15:00:39 +0000

Stress is a physiological response. Whenever your brain senses stress, adrenaline and cortisol are activated to raise your awareness and energy. However, not every stressful situation requires you to fight or flight. For example, financial stress is often a debilitating mental burden that reoccurs in a chronic manner. Yet there’s no need for your body to fight against a mailed-in bill and running away certainly won’t help, but your brain is still able to understand the consequences of financial problems. Fortunately, extensively reviewing your financial situation and simplifying as much as possible can drastically reduce financial stress.

The Benefits of Organization

Organization is one of the primary elements of successful finance management. Renowned accounting and online bookkeeping schools thoroughly explain to their students that the management of any form of finance is dependent on one’s ability to maintain organization.

In our case, this means the organization of every aspect of personal financing. The idea is to organize cluttered finances and simply things during the process. Categorizing all personal finance files does this. For example, you’re likely going to use the following categories:

Tax files and returns
Investments and retirement
Credit cards
Home
Insurance
Savings and checking accounts
Car and other bills

Initially, it’s ideal to organize these categories using folders and a bin. Sub sections reserved for invoices, outstanding bills and receipts can be created for further simplification. To reduce even more clutter, it’s possible to scan your files categorically save them onto your hard drive to create a organized digital record.

Embracing Technology

With organized personal finances, you’ll at least know where to store your bills and files as your hair turns grey from stress. Now, to actively combat personal finance stress and continue your crusade of simplification, it’s time to embrace technology by learning and using a personal finance software program.

The latest editions of residential-level finance software programs are packed with stress reducing features such as the ability to keep track of checking, savings and credit card accounts linked directly to your online bank as well as PayPal accounts. Budgets can be easily created and manipulated to help you find the most optimal compromise between finances and lifestyle. Most also include various financial calculators to give you a clear picture of your mortgage or home refinancing options. Furthermore, the high standard of helpful tutorials, tip and guides packaged into the software programs are often only bested by the kind of education available at online schools for accounting.

Assimilate or Eliminate

By now, you may have organized your personal finances and simplified things with the help of a personal finance software program, but you still have to continue the simplification process by cutting out the excess and solving two problems with one solution.

Look through your investment and retirement portfolio. Have multiple 401k accounts or one too many mutual funds? It’s likely time to roll it all over into a solitary IRA account and cut down on the investments until you’re only left with your prime mutual funds to manage. This process of simplification through assimilation should also be exercised on your insurance finances and telecommunication bills. By purchasing auto and home insurance from one provider as well as opting for a bundled telephone-Internet-television package from a telecommunications company, you’ll minimize the number of bills to keep track of while likely enjoying a small discount.

You may also find it necessary to simplify through elimination. This is particularly useful for bank and credit card accounts. Pay off the balances on those credit cards you hardly ever use because one or two credit cards for small and big expenses is often more than enough. Similarly, there’s often little need in keeping more than one checking and savings account open. It simply leads to more paperwork management, which is exactly what the simplification process is designed to combat.

There’s no telling how much money, time and strands of hair you can save by simplifying your personal finances to put an end to chronic stress. It may seem difficult to get started, but the stressful day-to-day burden of dealing with cluttered personal finances is ultimately more debilitating than simply working through the process of simplification.

This is a guest post by Connor Groening. He is freelance writing who’s main objective is to educate individual on how to be financially smart. He can be reached at connorgroening@gmail.com if you have any questions or would like to contact him.

Simple Year End Reading to start the new year right

B Simple — Mon, 27 Dec 2010 11:00:05 +0000

A new year is also upon us which means tax time and new year’s resolutions are round the corner. Many of us are still getting over Christmas but a new year is less than a week away. So now is the time to set your financial goals and do some year-end tax planning. Here are some post from this week that can help you plan for the new year:

Wondering where and how to start planning for the new year. This post Start Thinking NOW About How You Will Rock 2011! will help you get started.

If you want to simplify your personal finances, you need to have a budget. Now is a good time to start one if you do not have one or review and revise the one you have. Wisebread offers 8 Tips for Improving or Starting a Budget.

Looking for some additional help with your budget for the new year. Canadian Finance Blog offers 10 Free Sites for Personal and Family Budgeting. I am sure one of these site will help you get your budget in order.

To simplify your finances you should avoid some personal debt. Moolanomy offers some tips in How to Avoid a Personal Debt Crisis.

Sometimes to plan for the coming year its best to review the previous year. Dumb Little Man offers 7 Important Questions To Ask Yourself Before The Year Ends to help you review the previous year.

Its always important to review your tax situation. JoeTaxpayer offers End of Year Tax Tips.

So take some action to start 2011 off on the right foot so you can simplify your personal financial life by planning now.

Take one step at a time to simplify. Have a Happy New Year!!!

Ways to Simplify your Last Minute Holiday Shopping

B Simple — Tue, 21 Dec 2010 15:10:06 +0000

Does last minute Holiday shopping cause you stress or cause you to spend more money than you planned? You spend more because you want to just get finished with your shopping. In order to simplify your personal finances you should plan your holiday shopping well in advance so you are not stressing over what to buy and how much money you just spent. I know that is not always possible. We may forget to put someone on your initial list or you are busy with other things and have not found the time to go shopping. If you find yourself doing last minute holiday shopping here are some simple tips to help you simplify:

Keep to a Budget
Many times with last minute shopping we toss out the budget or don’t put a budget in place. You will usually regret it later. So make sure you take some time to set a budget. It will cause less stress on your finances if you use one.

Make a List
Just like having a budget you must go shopping with a list of things you plan to purchase. Its last minute shopping so go with a plan in place. You don’t have much time left to shop so make it easier on yourself by identifying what you are looking to purchase. If do not have a list you will usually end up breaking your budget or spend hours looking for that perfect gift.

Purchase gift cards
If you are under a time constraint, purchasing a gift card is always a great last minute gift idea. With a gift card you can stay within your budget you set, because a gift card enables you to set the exact dollar amount you want on the card. A gift card also enables the person to purchase the gift they would like instead of you spending hours trying to decide what to purchase. Gift cards are also easy to find which makes the purchase even easier to make.

Create homemade gifts
Instead of going shopping for holiday gifts why not create homemade gifts. By creating homemade gifts, you are not going to the mall at the last minute. You should be able to stay within your budget. You are not stressing looking for that perfect gift because everyone enjoys homemade cookies or desserts.

Its the thought not the price
During the holiday season, we always want to find that perfect gift. But we sometimes forget its the thought that counts not the price. So instead of stressing yourself out or breaking your budget to purchase what you thought was the perfect just buy a little simple gift. They will always remember that you thought of them not what you bought them.

TAKE ACTION
You only have few days left so if you have not completed your holiday shopping or have not begun your holiday shopping follow these simple tips to make the last few days less stressful and more enjoyable.

Enjoy your Holiday Season.

Take one step at a time to simplify your personal finances.

Simple Sunday Personal Finance Roundups – Scholarship Edition

B Simple — Sun, 14 Nov 2010 18:13:27 +0000

The Yakezie is the web’s largest personal finance and lifestyle blog networks. The Yakezie Scholarship officially launched this Thursday, November 11th. The Yakezie Scholarship is a one of a kind scholarship that focuses on not only helping someone in financial need, but also provides mentorship to all winners! To learn more check out HowToSaveMoney.com Yakezie Scholarship – December, 2010

Here are this week’s personal finance roundups which feature the best personal finance posts from the past week. I am sure you can find several posts that will help you simplify your personal finances:

Invest it Wisely offers Weekend Reading: Riding the roller coaster

JoeTaxpayer offers A Horizontal Roundup

My Dollar Plan offers Winners of First Favorite Things, Mutual Fund Settlements, and More

Barbara Friedberg Personal Finance offers 24 Free On-line Resources to Increase your Personal and Financial Wealth

Young and Thrifty offers Weekend Ramblings and PF Blog Love: Groupon Ban Edition

Girl with Red Balloon offers Link love: Zzzz edition

Len Penzo offers Black Coffee: Caution. Wet Paint. Lots of It.

Canadian Finance Blog offers Friday Links

Passive Family Income offers Controlling Heating Costs and Weekly Links

Bucksome Boomer offers Week in Review: Veteran’s Day Edition

Wealth Pilgrim offers
Veteran’s Day Links

DoNotWait.com offers Yakezie Challenge Link Time

Financially Poor offers Friday Night Likes

Budgeting in the Fun Stuff offers Weekly Favorites and Gratitude!

Personal Finance by the Book offers Veteren’s Day Roundup

Financial Highway offers Weekly Round Up-RESP Book Giveaway Edition

Green Panda offers Yakezie Challenge Time

Budgets are Sexy offers Weekly Roundup: All About The New Kardashian Card

Money Reasons offers MR Cache 2010, Nov 14 – Time is Moving Fast

20Something Finance offers Highlights, Favorites, Deals, & Oddities – Week of 11-8-10

Gen Y Wealth offers Weekend Reading | Greed is Bad Edition

Oblivious Investor offers Investing Blog Roundup: RMDs, Rollovers, and Contribution Limits

If you enjoy what you’re reading and want to stay up to date on the latest posts please make sure you follow me on Twitter and subscribe to my RSS feed. If you are serious about simplifying your personal finances also subscribe to SIMPLE FINANCIAL LIFESTYLE NEWSLETTER.

How a simple “NO” can simplify your personal finances

B Simple — Wed, 10 Nov 2010 12:00:48 +0000

Many times our personal finances are not simplified because we yes too often instead of a simple no thank you. We say yes to the many offers for discounts and additional purchases, which many times do not make our financial lifestyle any easier. For example, when making a purchase at a store, we are offered an additional discount on your purchase if you sign up for a store credit card. You have to ask yourself will that 10% or 15% discount on this purchase really make my financial life better. Probably not. Are the few dollars saved on this purchase worth the additional hassle over time. I would say NO.

By simply saying NO to that offer to save on your current purchase you have simplified your personal finances. Signing up for that new credit card is just another credit card you have to keep track of. That’s one additional bill to pay and an additional credit card could impact your credit score. So you tell me, is that additional saving worth the discount?

Saying NO THANK YOU will help you simplify your personal finances in the following ways:

Eliminate addition bills- by not applying for additional credit cards you will not have another bill to keep track of and pay each month.

Help your credit score – by not applying for those additional credit you can will not impact you credit score.

Less clutter – by saying no to additional purchases you have less stuff you have to store or maintain.

Save money – by saying no to additional purchases you have more money to save and start investing.

Save time -by saying no to those credit card offers or additional bank accounts. You save time because you are not spending your time keep tracking of those additional accounts.

Less stress – by not having those additional things your not stressing over if the bill was paid or how did I get so much debt.

TAKE ACTION
Next time your find yourself in a situation that may impact your personal finances use NO THANK YOU and it will benefit your personal finances in the long run.

Remember to take it one step at a time in order to simplify your personal finances.

If you enjoy what you’re reading and want to stay up to date on the latest posts please make sure you follow me on Twitter and subscribe to my RSS feed. If you are serious about simplifying your personal finances also subscribe to SIMPLE FINANCIAL LIFESTYLE NEWSLETTER.

Simple Sunday Personal Finance Roundups – Extra Hour Edition

B Simple — Sun, 07 Nov 2010 12:00:51 +0000

With daylight saving time over, we each gain an extra hour, as we all know time is very value, how do you plan to spend your extra hour? If you have not decide how to spend your extra hour. Spend a part of that extra hour reading some of this week’s personal finance roundups which feature the best personal finance posts from the past week. I am sure you can find several posts that will help you simplify your personal finances:

JoeTaxpayer offers A Fall Back Roundup

Green Sherpa offers Sherpa Picks: Co-Signing, Moving Home, and More!

Redeeming Riches offers PF Round Up: What Should You Do With Your Bonus, The Movie Edition

Simple Financial Lifestyle offers Simple Weekend Reading – Retirement Edition

Studenomics offers Catch Up On Links Time

Invest with Passion offers Round Up #5: Personal Finance Tips for Real Estate Investors

Free from Broke offers Daylight Savings and Links

Penny Frugalista offers Posts That Piqued My Interest: Fall Leaves Edition

Len Penzo offers Black Coffee: The Fed’s Disgraceful War on Average Americans

Canadian Finance Blog offers Friday Links

Money Help for Christians offers How I Make My Roundup

Bucksome Boomer offers Week in Review: Time Change Edition

Wealth Pilgrim offers Relax Yourself Friday Links

Passive Family Income offers Multiple Streams of Income and Weekly Links

DoNotWait.com offers Weekend Link Time

Financially Poor offers Friday Night Likes

Budgeting in the Fun Stuff offers Weekly Favorites and Gratitude!

Personal Finance by the Book offers Flip House Update 4 / Roundup

Financial Highway offers Weekly Round Up-Small Investors, Gold and Bonds, RESP and More

Green Panda offers What’s Cool Around The Web

Budgets are Sexy offers Weekly Roundup: Bloggers, Presents & Elevator Pitches

Money Reasons offers MR Cache 2010, Nov 06 – Will The DOW Rally?

Everyday Tips and Thoughts offers Link Round Up – Time to Read!

The Financial Blogger offers Financial Ramblings

Wise Bread offers Best Money Tips: 4 Ways to Fight Procrastination

Oblivious Investor offers Investing Blog Roundup: One Outfit for a Month?

If you enjoy what you’re reading and want to stay up to date on the latest posts please make sure you follow me on Twitter and subscribe to my RSS feed. If you are serious about simplifying your personal finances also subscribe to SIMPLE FINANCIAL LIFESTYLE NEWSLETTER.

Simple Weekend Reading – Retirement Edition

B Simple — Fri, 05 Nov 2010 12:00:59 +0000

Planning for your eventual retirement is key to designing your simple financial lifestyle. Here are six tips to help you simplify your retirement planning:

Set a retirement goal

Access your existing retirement plans

Automate your retirement savings

Take action by starting a retirement account if you have not established one

Review your accounts regularly

Diversify your retirement assets

Looking for more retirement advice. Here are some of the best posts from this week that can help you simplify your personal finances by planning for your retirement:

Most of us worry about how much we will need to retirement. Financial Samurai offers a solution to this problem in How Much You Need To Retire And Never Have To Worry Again

Many of us have 401ks as part of our retirement plan. Young and Thrifty offers 5 Ways to Improve Your 401K.

Free from Broke offers What Fees Are Part of Your 401(k) Plan?

Gen Y Wealth offers some quick tips to improve your 401k in How to Dominate Your 401(k) in 2011 and Beyond

Are you fearful that you may run out of money in retirement? Canadian Finance Blog offers Tips To Prevent Running Out Of Money In Retirement

If you are feeling like retirement investing is too complicated. Oblivious Investor offers Simple Investing is Better Investing

Wealth Pilgrim offers more simple retirement investment tips in Retirement Income Investments and Planning Made Simple

What type of retirement plan is best for you? Green Panda offers A Defined Contribution is Better for Us

A key to retirement is replacing your income. Frugal Dad offers some solutions in The Secret to Replacing Your Income

Fivecent Nickel offers How Much Will You Spend in Retirement?

Not sure how much you can contribute to your 401k and pension? KNS Financial offers 2011 Contribution Limits for IRA, 401(k), and 403(b) and JoeTaxpayer offers Pension Plan Limits for 2011

If you enjoy what you’re reading and want to stay up to date on the latest posts please make sure you follow me on Twitter and subscribe to my RSS feed. If you are serious about simplifying your personal finances also subscribe to SIMPLE FINANCIAL LIFESTYLE NEWSLETTER.

Simple Sunday Personal Finance Roundup – Big Yakezie Thank You Edition

B Simple — Sun, 24 Oct 2010 16:38:28 +0000

Welcome to this Week’s Edition of Simple Sunday Round.

On August 16th, 2010, I have joined the Yakezie Network Challenge. At that time my Alexa ranking was 761,131. My goal was to reach Alexa rating of 200,000 with in 6 months of taking the challenge. Well thanks to all those other Yakezie members you have helped as of today my Alexa rating is 194,176. I have reached my goal in less than 6 months. Not only has joining Yakezie the best network of personal finance sites helped with my Alexa rating, I have also meet other personal finance bloggers to network with. Thanks to all of those who have helped me reach this point. On to the next challenge of reaching Alexa 100,000 and building more relationships.

Here are this week’s personal finance roundups which feature the best personal finance posts from the past week. I am sure you can find several posts that will help you simplify your personal finances:

Green Sherpa offers Sherpa Picks: Cold Treatments, Job Hunting, and More!

Sweating the Big Stuff offers Best of the Rest: Communication Edition

Invest with Passion offers Round Up #3: Personal Finance Tips for Real Estate Investors

Mighty Bargain Hunter offers Mighty Bargains and links: gearing up for sugar rush

JoeTaxpayer offers An Identity Stealing Roundup

Free From Broke offers Savings and Certificate of Deposit Rates and Links

Youngandthrifty offers Weekend Ramblings and PF Blog Love: Lists Galore Edition

Len Penzo offers Black Coffee: Why Sex and Personal Finance Don’t Mix

Canadian Finance Blog offers Friday Links

Eemusings offers Link love (Powered by long weekends and golden dumplings)

Bucksome Boomer offers Personal Finance Giveaway Round-up

Wealth Pilgrim offers Friday Pilgrim Posts on Parade

Barbara Friedberg Personal Finance offers WHERE TO GET A HIGH (?) YIELD ON YOUR CASH: Part 1

Passive Family Income offers Yakezie Update and Weekly Links

DoNotWait offers DoNotWait! Roundup

Watson Inc offers Second Chance Round Up with Uncommon Money News

Budgeting in the Fun Stuff offers Weekly Favorites and Gratitude!

Personal Finance by the Book offers Home from Vacation Roundup

Dividend Monk offers Weekend Reading 10/23/2010

20something finance offers Highlights, Favorites, Deals, & Oddities – Week of 10-18-10

Financial Highway offers Weekly Review-Giveaway, Deadly sins, Debt busters and more

Green Panda offers Cool Links From Around The Web

Buy Like Buffet offers My Favorite Blog Posts For The Week Of October 18th

Gen Y Wealth offers Weekend Reading – Admitting Mistakes

Lazy Man and Money offers Personal Finance Links (Tribute to my Grandfather-In-Law Edition)

Everyday Tips and Thoughts offers Take A Break and Read Some Great Posts!

The Financial Blogger offers Financial Ramblings

Wise Bread offers Best Money Tips: Oktoberfest Recipes

Oblivious Investor offers Investing Blog Roundup: PE10 and Lazy Portfolios

If you enjoy what you’re reading and want to stay up to date on the latest posts please make sure you follow me on Twitter and subscribe to my RSS feed. If you are serious about simplifying your personal finances also subscribe to SIMPLE FINANCIAL LIFESTYLE NEWSLETTER.

Simple Weekend Personal Finance Reading – Kids & Money Edition

B Simple — Fri, 22 Oct 2010 11:00:51 +0000

Have you had the money talk with your kids? I know my parents provided me with a great financial foundation. I believe teaching your children the fundamentals of personal finances can go a long way in helping you simplify your personal finances as well as your child’s personal finances in the future. Here are some personal finance post from this week that can help you teach your child about personal finance and money.

Frugal Dad teaches you How To Raise Money-Smart Kids.

Moneyning teaches you How To Teach Your Kids The Concept Of Investing.

Budgeting in the Fun Stuff explains in Kids & Money – Keep it Simple. I am about keeping it simple.

Redeeming Riches provides 8 Financial Myths to Discuss with Your Kids.

Financial Highway offers some additional Kids and Money posts in Dollar Matters: It’s for the Kids Edition

Here are several other posts from this week’s that I know can help you simplify your personal finances:

Fiscal Fizzle provides 5 Components of a Good Layoff Contingency Plan. This should be implemented by everyone.

Simple Dollar discusses Degrees of Want.

Money Help for Christians offers several simple Using Financial Ratios to Gauge Your Financial Health Try these out to see where you stand financially.

Financial Highway ask the question Are Your Financial Stresses Killing You? This is the reason you want to simplify your personal finances?

If you enjoy what you’re reading and want to stay up to date on the latest posts please make sure you follow me on Twitter and subscribe to my RSS feed. If you are serious about simplifying your personal finances also subscribe to SIMPLE FINANCIAL LIFESTYLE NEWSLETTER.