Expenses During Buffalo's Snowageddon and Why They Pale Against the Real Fiscal Armageddon

People talk about the cost of working, and how you only need to save 70-80% of your income because your costs will go down when you retire.  This might be true for some people, but I don't think it is true for us.  We had a perfect example this week when we were stuck at home during a set of storms that hit the buffalo area.

Since we are home the food we are making is a little higher end (the meat store was open one of those days), the stove is on for longer, the electricity is on more and the heat sure is a lot higher.  Granted I am trying to do work while at home (and I do have a kid that makes that difficult) but I think most of the costs would be about the same.

However, I do have to admit I am not spending gas to get to work, which does save some money.  In this case both my husband and I will be working during the weekend to make the lost days up but if we were retired, we obviously would not.  That is about a $26 saving.  Granted my husband drives an hour each way for post-doc, five months ago that cost would have just be $6.  But let's go with $26.   Are the increase costs of staying home add up to $26?

The meat store was an increase of $5, plus some meals we normal eat on the weekends will have to be replaced for probably another $3.  But that is just $8, surely we did not spend another $18 just on utilities?  And honestly I am not sure.  I have not found an easy was of comparing utilities except for assume a 3% decrease of your costs by for every degree you lower the thermostat.   But that is monthly, plus we are not increase it for the entire 24 hour period, just while we are up. And that does not include water or electricity increases which I admit are very much increases while we are home.  Nor does it include the wear and tear of items at home.  Using my computer at home is likely to decrease years the computer useful for.  Same goes for the oven or microwave.  When I think about it, I don't think all of these expenses add up to $18, but there is a big expense I did not cover.

Health insurance
I spend a little over $140 a month for my share of health insurance, pre-tax.  My employer, well now, they send over $550 a month.  So really, I need an additional $550 plus the cost of taxes to cover my health insurance.  I know some people say, well what the ACA?  I am not holding my breath.  We might get something close but GOP won this last election and they want to get rid of it.  If the democrats don't come out in two years, we will have a republican president and congress and then ACA will be gone.  I can't trust democrats to get out and vote, because they don't.  So, I go with COBRA when I looking at expenses.

So, if compare your "working costs" against COBRA, I'm pretty sure you are going to come out ahead by working.  So please let my Smowmadegon encourage you to save and expect to spend more than what you live on now, because health insurance is not getting cheaper and we are just getting older. 

Obamacare and you....

I do try to keep this blog anti-political because I am political enough in the real world but sometimes, politics affects personal economy. And the Supreme Court ruling that the Patient Protection and Affordable Care Act aka Obamacare is constitutional will affect all young people's personal economy.

If you are under 26, great for you, you will still be covered under your parent's insurance, no matter if you are in school or not, if you are single or married, anything. It is all age based now. However, what happens if your parents don't have health insurance or once you age out?

You must find insurance, either through your employer or on the open market. You will have an easier time finding insurance on the open market in 2014 because insurers cannot deny you based on medical conditions. But they can increase the bill way beyond what you can afford, what then? Well you have to find something or get fined. An adult who does not have health insurance by 2014 would be penalized $95 or 1 percent of income, whichever is greater, so long as the amount does not exceed the price tag of a basic health plan. But by 2016, the penalty increases to $695 for an uninsured adult, and up to $2,085 per household, or 2.5 percent of income, whichever is greater.

What if you really cannot afford it? Well it depends. Medicaid is being increased to cover people with 138% of the federal poverty level but that won't cover most people. I made more than that working part time in college. Otherwise, there are tax credits if you are above the 138% cut off but are still low income. But that be enough? For some people, absolutely not, especially if you lose your job. Personally I would still be saving enough in your EF to cover COBRA.

So what is my opinion? I like it but I was one of those who aged out of their parent's plan and was unable to get a private plan for any amount of money. I ended up COBRAing my mom's insurance for a total of $550 per month. Also, this means those who want to retire early but could not because of pre-existing conditions now (well in 2014) can. However, I am betting health insurance costs will go up so plan for a big jump in those costs in near future.