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Nathaniel Sillin

Practical money matters by Nathaniel Sillin

Whether it’s a matter of comfort, appearance or safety, there are many medical procedures that you may want or need, but your health insurance won’t cover.
LASIK eye surgery may fall into the want category for most people and it can be a hefty investment with each eye costing several thousand dollars. For those wanting to start a family, infertility treatments, which can cost over $10,000, may be closer to a need. Yet most states don’t require health insurance to cover treatments.
Considering the lasting impact that these and other procedures can have on your life, you may not want to seek out the least expensive option. However, that doesn’t mean you should forgo attempts to save altogether. From tax-advantaged accounts to comparison shopping doctors, there are many approaches to safely cutting costs.
See if you could get a tax break. Although tax breaks don’t lower a medical procedure’s price, tax deductions can decrease your taxable income and by using a tax-advantaged account you may be able to pay for some medical procedures with income-tax-free money.
Take a medical expense tax deduction. If you itemize your tax deductions, you can get a deduction for your qualified medical expenses that exceed 10 percent of your adjusted gross income. LASIK and some fertility enhancement treatments may qualify. However, cosmetic surgery doesn’t unless it’s related to a congenital abnormality, disfiguring disease or an injury resulting from trauma or an accident.
Use an employer-sponsored flexible spending account (FSA). Some employers offer FSAs as an employee benefit. You can make tax-deductible contributions to the account each year and withdraw the money tax-free to pay for qualified medical expenses, including health insurance deductibles and copayments. However, this approach could require planning as you may forfeit remaining FSA money at the end of each year.

Enroll in health insurance with a health savings account (HSA). An HSA account is similar to an FSA in that you can contribute pre-tax money and withdraw funds to pay for eligible medical expenses tax-free. HSAs don’t have the use-it-or-lose-it requirement, but to qualify for an HSA account, you need to enroll in a High Deductible Health Plan (HDHP) and can’t be eligible for Medicare.

Ask your health insurance company about discounts. Even when a health insurance provider doesn’t cover a procedure, members may still be able to save money by going through their insurance. For example, health insurance generally won’t cover the cost of LASIK surgery, but your provider may offer a 5 to 15 percent discount if you get the surgery at partner eye care centers.

Health insurance requirements can also vary from one state to another, and you should double-check your benefits before assuming something isn’t covered. Infertility treatment is one of these gray areas, as some states require health insurance plans to provide coverage while others do not.

Compare costs from different providers. Varying medical costs sometimes make headlines when patients find out that a $3,000 medical procedure at a hospital could cost several hundred at a nearby clinic. If it’s not an emergency, there are websites that you can use to comparison shop nearby medical centers and get estimated prices.
Some people also look for savings in other countries. Medical tourism is a growing industry, and millions of people travel outside their home countries seeking lower costs, higher-quality services, treatments that aren’t available at home, a relaxing environment to recover in or a combination of several of these factors. While the U.S. is a destination for some medical tourists, Canada, Southeast Asia, Latin America and parts of Europe are also popular.

Bottom line: Although you may not be able to convince your health insurance company to cover what it considers an elective procedure; you can turn to other methods to save money. As with other large expenses, you can take a dual big- and little-picture approach by looking for tax breaks that lower your effective cost and savings opportunities that can reduce a procedure’s price.

Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at twitter.com/PracticalMoney. His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances.

Practical Money Matters with Nathaniel Sillin

How many times have you gone to pour milk in your coffee, only to see that the date on the carton was yesterday? Some people will instinctively throw it away, but chances are that’s not what the label is intended to convey. It’s likely a marker for when the food might taste its best, not if it’s safe to eat.
By some estimates, as many as 91 percent of consumers may misinterpret food date labels. It’s no surprise as there are dozens of different lables in use, but the misunderstanding and lack of meal planning are contributing to a larger problem. Between 30 and 40 percent of the U.S.’s food supply winds up in the trash or a compost container.
The benefits of reducing food waste are numerous. You’ll save money, which may be reason enough. You could also be lowering your carbon footprint by keeping spoiled food out of landfills and cutting down on the growing and transportation of food that doesn’t get eaten.
Cutting back on this waste could start with understanding what food labels actually mean.
Don’t misinterpret food dates as expiration dates. According to the United States Department of Agriculture (USDA), aside from on infant formula, food label dates aren’t an indication of whether or not the food is safe to eat. For example, “best by” may mean the food will taste, look and feel its best if its eaten by that date. It could still be good for days, weeks or even months (for non-perishables) after that date.
Some states do require expiration dates on milk or meat and food labeling could become less confusing across the country. But for now, you may need to rely on your judgment. The USDA writes that if foods don’t show signs of spoilage, such as changing colors or giving off an unpleasant smell, they could still be safe and wholesome.
Quick tips for keeping fruit and vegetables fresh for longer. Regardless of the date, proper food storage can impact a food’s longevity.
•Wait to wash food until you’re about to cook or eat. Otherwise, the moisture could spur bacterial growth.
•Strategically store items in your refrigerator. Your food will typically last longer if you put the least perishable items on the door, meat near the bottom back (unless there’s a meat drawer), veggies in the crisper and dairy or drinks near the top.
•Generally, you want to keep fruits and vegetables away from each other because many fruits produce ethylene gas and exposure to the gas could cause vegetables to spoil more quickly. There are also vegetables that produce the gas and fruits that are sensitive to it.
•If you’re storing a fruit or vegetable that gives off and is susceptible to ethylene gas, wrap it in aluminum foil or store it in a paper bag rather than using less-breathable plastic wrap or bags.
You can look for more tips about particular foods online. There are also apps that can automatically connect to your supermarket loyalty programs to track what you buy (or you can upload a picture of your receipt), warn you when something may be going bad and recommend recipes that incorporate those foods.
Find creative uses for foods that are on their way out. Whether you use an app to sync shopping lists and schedule meals or use a paper list, meal planning can help cut down on waste as well. But even with great intentions sometimes things get forgotten, or meals get pushed off until it’s almost too late.
You can save vegetables from the trash by roasting them, making soup or turning them into a casserole. Carrots, potatoes and other root veggies (plus zucchinis) can be grated and fried to make fritters. You could bake fruits into breads, throw them into smoothies or freeze them for later. In the end, the goal is to use everything you buy.
Bottom line: Food waste could be draining your wallet, hurting the environment and in some cases, may be completely unnecessary. Learning to correctly interpret food labels and performing a sight and smell test before throwing something away could help. Taking the time to prepare before you shop, having a plan for how you’re going to use the food you buy and being okay with a last-minute backup plan can help even more. In the end, taking the extra time to evaluate the true condition of your food can save you money.

Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at twitter.com/PracticalMoney. His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances.

Practical money matters by Nathaniel Sillin

MOVING INTO a place of your own for the first time is a huge step. I remember my first post-college apartment move. It was nothing special, but it was mine. It came with a few new challenges and responsibilities and all sorts of opportunities. For the first time, I was able to decide how to decorate an entire living area and turn a blank slate into a home.
Here’s some advice for finding what you’ll need on a budget and a few inexpensive ideas to make otherwise unimaginative rooms come to life.
Look for hand-me-down and used furniture. Furniture – tables, chairs, bookshelves etc. – often takes up the most space and can be the biggest drain on your budget. You could start by mapping out your home using online floor plan software and determining what might fit where.
When it comes to finding furniture, friends, family members and friends of family members may have something they want to get rid of and simply haven’t had the time or energy to do so. Also consider marketplace websites’ free sections and the nonprofit Freecycle Network™, which hosts message boards
where you can find local people giving away their unwanted belongings.
To find used furniture that’s for sale, head to consignment stores, garage and buy-sell-trade social media groups. There are even startups creating online marketplaces specifically for furniture, although they’re generally limited to large cities.
Get your kitchen in order. Many kitchen essentials, such as silverware, can also be found for cheap at second-hand stores. But if you’re looking for something new, you can save money by shopping at discount stores and online clearance sites.
Avid cooks who want to invest in a few kitchen appliances might consider waiting for large seasonal sales. For instance, standing mixers, slow cookers and other small appliances often go on sale every Black Friday.
Brighten up the place. While your apartment may have overhead lighting, a few standing lamps can set a much nicer mood. The good news is lamps often stay in the corner and won’t necessarily show a lot of wear and tear. In other words, this is another great buy-used opportunity.
Don’t shop second-hand for everything. There are a few things you don’t want to buy used: towels and bedding. Add mattresses to that list as well if you’ll be looking for a new one.
When it comes to sheets, ultra-high thread counts could be more of a marketing gimmick than an indicator of quality. Try to focus on how the fabric feels, find a weave that you like and you might be pleasantly surprised by the low-cost options at big box retailers. The same test works for towels.
Purchasing a new mattress can take a big chunk of your budget. Consider one of the new online mattress retailers that sell high-quality goods for less. Buying a mattress without testing it first may seem weird, but many offer free returns within the first few months.
Add a few personal touches. You’ve got the necessities covered, but how do you turn a generic apartment into a place that feels like home? Think walls, windows and floors.
Rather than painting, consider a cheaper (and easier) route by opting for removable wall decals or wallpaper. There are all sorts of shapes, designs, prints and even adhesive chalkboards for under $20. You could also decorate with paper, canvas or metal prints of your favorite photographs. Windows can get a cover-up treatment as well, but rather than spending a lot of money on brand new blinds you can get curtains that add color or a pattern to your room.
An area rug can help tie a room together, but they can also be prohibitively expensive. This is another item that you might not want to buy used unless you know the seller. Luckily, home good stores and some big box retailers usually have at least a few inexpensive options.
Congratulations on the move. Outfitting a new apartment doesn’t happen overnight. Especially if this is the first time you get to pick what to buy, it can take time to find your style and items to match. However, even with a limited budget, there’s a lot you can do to make a space your own.
Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at twitter.com/PracticalMoney. His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances.

Practical money matters by Nathaniel Sillin

FLIPPING a house can seem like a walk in the park when it’s wrapped into a few montages during a half-hour TV program. Find a run-down property. Buy it. Take out a few walls, paint, replace carpets, upgrade the kitchen and voilà – you could make tens of thousands of dollars in just a short time.
Reality is seldom so straightforward. Flipping a home can be risky and there’s no guarantee you’ll profit from it.
Finding and buying the right house at the right price point can be difficult. The shows often start with the submission of a winning offer on a home. You might not realize that it takes a lot of work to determine what a potentially good flip looks like and find a property to match.
Experienced flippers have learned how to estimate costs and work backward. A rule of thumb in the industry is to take 70 per cent of the potential selling price – what’s known as the after-repair value, or ARV – and then subtract the renovation costs and use the result as the maximum buying price.
You’ll need a lot of background information, including comparable selling prices of similar homes, to figure out the right numbers. The ability to be honest with yourself while estimating the cost of parts and labor is also important.
For example, if you estimate that you could sell your renovated home for $200,000, you’d start at $140,000, which is 70 per cent of that figure. If you calculate that the renovation costs will be $40,000, you’ll arrive at the maximum buying price of $100,000. The 30-per-cent margin that remains if everything goes according to plan isn’t entirely profit – you might still have expenses like closing costs or reimbursing your investors.
You need a lot of working capital. While paying cash for a home can expedite the sale and increase profits, it might not be an option for beginner flippers. However, traditional lenders don’t necessarily offer financing for flips, especially if you’re trying to fix up a dilapidated home. Even when they do, you might not be able to borrow enough to cover all your expenses.
Instead, some flippers turn to hard-money lenders, private individuals or companies that issue short-term loans backed by real assets, such as the home you’re buying.
With either traditional or hard-money lenders, expect the financing costs to be higher than those you’d pay for a mortgage when buying a home to live in.
Keeping an eye on your total budget is essential. If you borrow enough money to make the purchase but don’t have cash on hand to pay for the renovations and unexpected contingencies, you’ll be stuck before you even start.
In addition to the purchase price, you’ll need money for renovations, upgrades, inspections and permits. Also, consider the cost of ownership between the purchase and sale. Carrying costs, including utilities, financing, insurance and property maintenance, can add up each month.
You want to move fast. One thing you pick up from the TV programs is that time is of the essence. In competitive markets, you’ll need to move quickly to evaluate a home and put in an offer before someone else buys it.
Successful flippers might have a real-estate license or work with a real-estate agent to gain access to the multiple listing service, or MLS, a directory of homes that are for sale. Others look for homes that are for sale by owner or use direct-mail campaigns to reach out to prospective sellers.
Once you buy the home, there’s another race against time to complete the work and make a sale. Working with a trusted contractor and real-estate attorney could expedite the project. Once you’ve developed a strong working relationship, you might even want to invite others to join your team and contribute their work in exchange for a cut of the profits.
Bottom line: Flipping homes can be profitable, particularly for people who have professional real-estate experience, but don’t expect it to be easy money. Months of hard work can go into a flip without any guarantee of success.
Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at twitter.com/PracticalMoney. His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances.

Practical money matters by Nathaniel Sillin

CITIES ATTRACT people for different reasons, which is partly why they are such popular vacation destinations. Summer is one of the best times to visit, as the long days give you extra hours of sunlight for exploration and many cities host a variety of free seasonal activities.
The busy season can mean rising prices but there are a few city-specific savings tactics that can take some of the strain off your budget.
Look for insiders’ knowledge about the city. Many major cities are covered by bloggers who focus on how to enjoy their hometown on the cheap. You could start your planning by researching online with the keywords “free or cheap” and the city’s name. Some of the well-organized websites will even let you filter events by date, cost and your individual interests.
Also check the city’s local-newspaper sites for lists of free or cheap events. During the summer, many cities have free outdoor concerts and movie screenings, for example; you can pack a picnic dinner and enjoy the warm weather and show.
Move around the city like a local. It might make sense to take an occasional cab but some cities have robust public-transportation systems. Take a few minutes to study the city’s layout before arriving and don’t be afraid to ask locals for advice or directions.
If you’re in town for more than a few days, look into time-based public-transportation passes. For example, you can buy a seven-day unlimited-ride MetroCard for subway and bus rides in New York City for $32, plus a $1 new-card fee if you’re not refilling an existing card. You can even use it on the crosstown buses, which can quickly take you from one side of Central Park to the other.
Explore new cuisine. One of my favorite parts about visiting any city is trying its restaurants. Whether you save up and enjoy one of its finest eateries or find a hole-in-the-wall hidden gem, there’s usually something for everyone as far as eating goes.
Luckily, many cities’ must-try foods are on the inexpensive side. Chicago’s hot dogs, Portland’s doughnuts and Austin’s tacos all often cost less than $5. You can also look for lists of cheap and delicious eats alongside the free-entertainment tips from frugal bloggers and local newspapers.
High-end restaurants will inevitably be pricey but, if it’s on your “must-do” list, there could be ways to save. Some restaurants offer less expensive brunches or early-evening tasting menus, or you might be able to grab a small bite and a drink at the bar rather than a full meal.
Find the deals on offer if you’re going to shop. Some people see shopping as an intrinsic part of a vacation and cities are often home to chains’ flagship stores, boutiques and specialty shops. The wide variety of options could tempt you to overspend but it also means there are plenty of opportunities to save.
If you’re in the luxury market, look for sample sales, where you might be charged less – relatively – for high-end brands products formerly on runways or showroom floors.
Trying to stick to a tight budget? Look for large retailers’ clearance sales, particularly if you’re visiting when stores are clearing seasonal items off their shelves.
Think outside the box when it comes to lodging. Most seasoned travelers know that hotels in the heart of tourist areas are often the most expensive and many turn to home-sharing sites as cheaper alternatives.
Another trick is to look for availability at hotels in the city’s financial district. Holidays and weekends can bring vacancies in commercial areas, which could mean lower rates. Hotels right outside the main township but accessible by public transportation can also cost less.
Bottom line: Cities can be expensive, particularly during the busy summer, but there’s a reason they’re such popular vacation destinations. Whether you’re interested in museums, shows, food, historic sites or all of the above, there are ways to save and make the most of your summer in the city.
Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at twitter.com/PracticalMoney. His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances.