bills Archives - Personal Finance For Beginners In 30 Minutes

Tips to deal with financial emergencies

By Blog

What if a financial emergency, crisis, or sudden need requires more cash than you have available in your savings account? It could be a large medical expense not covered by your health insurance plan, a large down payment on a house, or an extended period of unemployment.

You may be tempted to simply turn to your credit cards to make up the difference. While credit cards may help temporarily bridge the gap in a financial emergency, they are not a long-term crutch. In fact, turning to credit cards can lead to a new crisis, as high-interest debt turns into a monster that can’t be paid down.

What can you do once the special savings account runs out? There may be no magic solution, but there are ways to make the problem more manageable:

  • Talk with trusted friends or relatives, with the goal of eliciting fresh ideas about how best to deal with the emergency. They may come up with an alternate approach that lowers the overall cost.
  • See if the source of the cost (hospital, bank, etc.) is willing to accept an alternate payment plan. For instance, if a large down payment is required, is there any way to reduce it? Or, if you have just been billed for a $30,000 hospital procedure not covered by insurance, will the hospital allow you to work out an installment plan to pay it off? If the answer is yes, watch for special conditions, fees, or excessive interest.
  • Immediately come up with a plan to cut your expenses. Start with the flexible expenses that are nice to have, but are not absolutely necessary. Personal Finance For Beginners In 30 Minutes, Vol. 1 explained how opting for cheaper phones, cable TV service, and cars can potentially save thousands of dollars every year.
  • Start selling stuff. Furniture, antiques, jewelry, musical instruments, and collectibles may be hard to let go of, but they can provide cash in a pinch. Try to establish the fair market value for the items and your target prices before talking with potential buyers.
  • Consider radical approaches, including rethinking your housing and transportation requirements. For instance, renting out property, downsizing living arrangements, or shifting from cars to public transportation can make a huge impact on annual spending.

This post was excerpted from Personal Finance For Beginners In 30 Minutes, Vol. 2, by Ian Lamont. All rights reserved.

Do you really need cable TV?

By Blog

According to the Television Bureau of Advertising, nearly 60% of U.S. households subscribe to cable television. More than 30% use alternate delivery systems, including satellite TV.

If you get full-service cable TV or satellite television, ask yourself the following questions:

  • Do you really need hundreds of channels of cable TV programming?
  • Are you actually watching those four premium services that you added on to your subscription package?
  • Are your kids better off watching 10 hours of Nickelodeon and the Disney Channel every week?
  • Are CNN and CNBC providing information that you can’t get from the Internet for free?

The answer to these questions is almost certainly no. According to Nielsen, which tracks TV viewing habits, the average U.S. household receives 189 cable channels but only watches 17 of them. Yet people don’t hesitate to shell out $100 or more every month.

Take a look at the extra charges on the following telecommunications bill, which piles on more than $50 in premium channel charges in addition to the $135 base price for Internet/cable/phone service. The grand total is $226 per month:

RCN cable TV bill

There are some situations which do require cable or satellite television. Residents of rural areas or distant suburbs may be too far away from broadcast towers to receive over-the-air broadcast signals. If you want foreign-language programming, you will need to pay extra. In some television markets, professional sports are only offered through a cable television subscription. And there are some people who can’t imagine life without HBO or ESPN — they consider the dramas, games, and other programming to be life priorities!

But not everyone needs expensive subscriptions to premium channels. Millions of households would do fine with just the basic service package that brings in the nearest terrestrial broadcasters. A recent FCC study found the average cost of basic service is a little over $20 per month. For people who live near major urban centers, basic cable can be replaced by an antenna that plugs in to the back of a flat-screen TV. For a single one-time charge of $40, an antenna can bring in 20 or more digital television signals.

This post was excerpted from Personal Finance For Beginners In 30 Minutes, Volume 1:
How to cut expenses, reduce debt, and better align spending & priorities.