We’re being told that one of the future benefits of the new health-care plan (assuming it survives the Republican onslaught and general hysteria) will be an opportunity to buy long-term care insurance at an affordable price.
That’s a much-needed program. But one has to wonder: apparently the average benefit will be about $50 to $75 a day. That’s as nothing: in Maricopa County, where Phoenix resides, typical cost for a nursing home is over $200 a day! And that’s just the base rate: everything, but everything costs more. If you need a wheelchair, you have to rent it. Any therapy or special care beyond just leaving you sitting there and maybe wheeling you down to the dining room is extra. At that rate, a $50/day stipend won’t hold off bankruptcy for long.
We’re told it may be enough to cover adult day care, which apparently ranges in cost from $20 to $75 a day, depending on where you live. This arrangement, which essentially entails institutionalizing an infirm senior during the day but allowing her or him to return home at night, would require someone to schlep you to a day care center every day. You have to possess all your marbles, be continent, and be mobile, a combination that doesn’t necessarily describe most elders who need daily care.
In-home care, which might keep you out of an institution or at least stave off the evil day, costs $112 to $192 a day, only a few dollars less than the average $205 a day for a private room in a nursing home.
My long-term insurance with Metlife costs just under $80 a month, and it will pay up to $128 a day for nursing care for an unlimited number of years, plus caregiver training, respite care, durable medical equipment, and installation and maintenance of an emergency response system.. The cost is relatively low, compared to the CBO’s estimate for the federal program, because I bought in when I was fairly young.
So, by comparison the government plan will be expensive and its benefits skimpy. Given that nursing home care can quickly bankrupt you, even a little help would be good. But if you’re on the hook for $150 a day even after having paid $128 a month for coverage over many years, you’re looking at drawing down $4,500 worth of your assets a month for nursing care. That’s $54,000 a year.
A $50/day benefit comes under the heading of too little, too late.
So here’s what $75 buys you at th’fancy hair salon:
LOL! Once, within living memory, it looked like this!
Not bad, given the model’s overall decrepitude and the truly awful haircut the artist was presented with.
🙂 Even though Art the Barber had pretty much shaved my head around the sides and back (except for the wad he left in back), I walked out of the Salon Estique (sic…no kidding!) feeling like my head was about five pounds lighter. Amazingly, the new stylist, Judee, managed to cut a fair amount of hair, mostly from the shaggy pouf Art had left on top. There wasn’t much she could do with the sideburns, which are supposed to be feathered (or at least, used to be under Shane’s regime), but they’ll grow in.
The coif is now back to where I can scrunch the curls in, without having to stand in front of a mirror and primp with a hair dryer for 15 minutes every morning. That helps a great deal.
With the introductory discount, Judee only charged $35 for her $65 talents! I gave her a $10 tip for a total of $45, a real bargain considering what she accomplished with a disaster area. Not only that, but the salon provides free “bang trims,” touch-ups around the ear and hairline, an amenity that can delay a full haircut for a couple of weeks or more.
Judee is a tattooed, pierced pistol with a scarlet streak in her black hair…in fact, a very charming woman once you get yourself settled in to the colorful external persona. She recently moved here from Portland, having coveted a life in the low desert since she was five years old. A great conversationalist, she described how she had developed a love of fine cooking and learned how to do it from a number of well-known chefs she’s met in her many travels. I liked her a lot.
Having my hair hassle-free and looking halfway decent is going to be worth her regular fee. Well worth it.
So I’m sitting in my counting-house entering Friday’s paycheck in an Excel account, when suddenly—ever so belatedly—it registers with me:
One of these diddly little semimonthly community college paychecks is almost as much as my entire month’s nondiscretionary budget.
Yeah. I could cover all of the monthly recurring can’t-get-out-of-it bills with a single net paycheck. Not only that, but my discretionary budget—all other costs except those that are required to keep the power and water running and creditors away from the doorstep—is about the same. Which is to say that when I’m teaching three sections, my measly community college pay alone would cover all my regular costs.
Naaaahhhh….couldn’t be! Out comes the calculator: tap tap tap tap…
Sure could be: the net pay from two paychecks comes to $35 short of my total month’s budgeted expenses. That means that Social Security—almost a thousand bucks!—is mostly gravy.
How did this come about? Three months ago I figured I would be living out of a grocery cart under the Seventh Avenue underpass. How could I have so radically misestimated my cost-to-income ratio?
Well, in the first place, when I started at the community college, I had no way of knowing for sure what my net pay would be. Tax rules are a total mystery to me. Extrapolated from what I’d earned in the fall from two courses, my guess at the net for three sections was significantly less than the actual amount.
Then there’s COBRA. From what I can tell, there’s no way to know what that will cost in any given month, at least here in the State of Arizona, where the Beast has effectively been killed. Since last January, I’ve had four bills for COBRA, no two of which have been the same. COBRA is the largest single item in the expenses list, and it’s impossible to predict. When you don’t know what the bill is going to be, all you can do is budget for the highest amount you can imagine and pray for the best.
And there’s Social Security, whose rules are almost as bizarre as the IRS’s. When you “start” SS in January, you don’t get your first check until February. No, you can’t “start” it in December so you’ll have an income during your first month of unemployment; try that and they’ll count your soon-to-be defunct 2009 salary against you and take the SS money away from you for having committed the crime of earning too much. Because I was forced to take Social Security a year early, thanks to GDU’s layoff activities, in 2010 I come under the government’s earning limitation: every penny more than $14,160 is taxed at a 50% rate—to extract the amount owed, the government withholds an entire month’s SS check, the unused remainder of which you will see (if you’re lucky) the following January.
Well, 14 grand is well under the poverty level. The gross for the two—$14,000 for the part-time teaching and $15,000 for the “unearned” Social Security—also comes to a figure that IMHO qualifies as “poverty.” Because my investment advisor wanted me to forestall taking a drawdown from savings for a year in hopes that during 2010 my investments would recover from the rape of the economic crash, that left me trying to live on 44 percent of my former pay. Significantly less than that—more like 34 percent—if you counted last year’s freelance income and noonlighting income.
So I started out feeling mighty poor. And not knowing what the 2010 take-home from the various sources of cobbled-together income would amount to, it wasn’t evident in January that enough would come in to cover $1,600 worth of expenses. Nor, since in the old regime the discretionary budget was $1,500 a month, was it evident that I could actually buy groceries and live comfortably on about half that.
What to do with these new-found riches?
Before we make an appointment with the style adviser Neiman-Marcus, let’s consider that the freelance teaching income stops in May, just as utility bills climb toward the stratosphere. It doesn’t restart until the end of August. If the only revenue that arrives during the summer is net Social security, each of the three summer months will see a $475 shortfall. So, I’ll need $475 x 3, or $1,425, stashed in savings to see me through the summer.
But that’s only a month and a half of thousand-dollar surpluses. [ahem.] But what we have here is three months of thousand-dollar surpluses. Come summer of 2011, we’ll have nine months of thousand-dollar surpluses.
Gosh.
One way or another, even in 2010, the Year of Penury, I’m looking at about $1,500 that could be saved or spent. Just during the spring semester.
My inclination? Spend. Well, at least spend part of it.
Every time I think of myself sliding into my dotage on the cusp of poverty, I think of My Bartleby, the eccentric woman of my own age I stupidly hired as a secretary. It was hard for me to go in for the kill with Bartleby, because I empathized too much with her. Crazy old ladies have a lot in common. So I think “there but for the grace of God” and contemplate ways to avoid going down her path.
To wit:
• I would like not to live so cheap that my hair looks scruffy and I go around in scroungey-looking second-hand clothes that are out of date, saggy, and baggy.
• I would like not to get so far behind the times that there’s no hope of catch-up, simply because I refuse to update my hardware and software, refuse to plug in to pop culture, pay no attention to what’s going on around me, especially if paying attention costs more than about a buck and a half.
• I would like not to let minor health issues go until they become middling- to major health issues because I’m too cheap to cough up the copay to see a doctor.
• I would like not to be so afraid of spending a few bucks here and there that I bring personal growth (and life) to an end.
So. First off, the hair: last time I went to the $30 hairdresser, he gave me a tuft sticking out of the back of my head and a half-spiked “cap” on top of too-short sides and back, which can be made presentable only by dint of 20 minutes worth of primping in front of a mirror with a hair dryer. Every. single. time I walk into that guy’s salon, I tell him I hate bangs falling down in my face. Every. single. time I walk out, I walk out with bangs falling down in my face.
The $75 hair stylist knew how to cut short hair without bangs, and he knew how to make a style that could be fingered into curls and waves without benefit of hair dryers and strand-scorching curling irons. Today I’m going to a new stylist, closer in than the old guy, about the same price. By the time I’ve added the tip to her $65 charge, it’ll be right up around $75. But it may be worth it. We shall see.
Next: I have got to get some clothes! Day after tomorrow, when I’ll have a free day, it’s off to B’Gauze and Talbot’s in search of something that will fit. Don’t hold out much hope, but at least the search can begin.
Then: entertainment. Ticket purchased for a concert downtown May 1. Then, it’s off to the Botanical Garden for a membership and tickets to Jazz in the Garden, if they have any left.
Alors, it’s a start, anyway. With any luck the clothing stores will have something on sale.
This is a guest post from Crystal of Budgeting in the Fun Stuff: A Personal Financial Blog about the Next Financial Step. It’s an open fiscal diary and a personal finance blog rolled into one that is looking to get as many people involved as possible.
This article at Yahoo Finance,How to Gauge Your Middle-Class Status, made my inner-financial competitor salivate. It’s chocked full of ways to compare yourself to others. I know that is a bad thing, but I want to spread the naughty.
According to the article, the typical two-parent, two-kid household:
Makes $51,000 to $123,000 with both parents working a total of 3747 hours per year.
Owns a home worth $231,000 that is about 2300 square feet.
Spends about $5100 a year on health insurance and non-covered expenses if their employer provides their insurance.
Spends $12,400 a year on two medium-sized sedans that were bought for $45,000.
Puts $4100 aside for college expenses for two kids (it seems to mean total…that’s a little low if you really want to help, right?)
Spends $3000 on an annual one-week vacation.
Doesn’t save at least 3.2% a year for retirement.
Spends about $14,200 a year on clothes, food, entertainment, and living expenses.
Has a typical head of household that has about 2 years of college under his/her belt.
Wants free time more than they want healthy kids, a strong marriage, or to be wealthy.
Has a net worth of about $84,000.
Spends about 18% a month towards debt.
Okay, so my husband and I seem to be doing very well comparably, but we don’t have two kids to contend with either. Here’s how we fall; we:
Make $78,000 with both of us working about 4000 hours total.
Own a home worth $130,000 that is about 1750 square feet.
Spend about $1500 a year on health insurance and non-covered expenses – my company provides insurance and hubby pays $75 a paycheck.
Spend $7000 a year (including his car payments) on two medium-sized sedans that were bought for $12,000 and $21,000.
Put $0 aside for college expenses (I know, unfair comparison, we suck)
Spend $1500 on an annual one-week vacation.
Save at least 15% a year for retirement.
Spend about $12,000 a year on clothes, food, entertainment, and living expenses.
Have two college graduates and one person in graduate school.
Want health and a strong marriage way more than free time or to be wealthy…although I want it all.
Have a net worth of about $125,000.
Spend about 19% a month towards debt (since we overpay our mortgage).
What do you think of the typical amounts?
Check out these other posts from Budgeting in the Fun Stuff:
People often rail against giving up their dreams, working a 9-to-5 job they hate and having the life sucked out of them. But what if you work atypical hours doing something you’re passionate about with an outlet for your creativity? Are you safe from job-induced insanity?
Hardly.
I’m always amused when people solve the problem of work-induced stress by saying, “Just do what you love,” often followed by, “and you’ll never work a day in your life.” Not so, I say—and here are just a few reasons:
• Often work you love is precarious. Want to be an art teacher, college professor, journalist . . ? The scarcity of stable, full time employment in these fields can leave you scrambling from one temporary gig to another with spotty health care and benefits.
• The politics that arise in environments with low job security can be reminiscent of a snake-pit. I once had a long conversation with a friend who felt he’d sold out by becoming an attorney in some ways, but who enjoyed the cooperation between opposing attorneys during their cases. I had to admit to this friend that the teachers in the school where I worked refused to share teaching ideas or collaborate because they were in direct competition with each other for their jobs. Not quite what I’d envisioned when I took up my passion.
• When you believe in what you do, you tend to take it home with you—literally and figuratively. Journalists, writers, teachers, musicians, artists (etc.) tend to mull over projects constantly, not simply while they are at work. You may find yourself putting in extra (unpaid) hours because you enjoy what you do and want to do your best.
• Your passion can become corrupted by the employer-employee relationship. When you believe in what you do, you’re likely to have strong opinions about how it should be done. You may have an idea about how you want a specific graphic design project to turn out, but your employer doesn’t agree. You may have a strong opinion on student/teacher ratio that doesn’t jibe with the state budget. Your editor may request changes in your writing in the name of marketability.
When someone else pays you to do something you’re passionate about, you often find yourself trying to decide whether to compromise, to subvert or to leave.
Passionate about your career? Should you abandon all hope?
That sounds like a personal question to me. I must admit that for all the drawbacks I found in working in a field I love, I’ve never quite been able to imagine myself doing something else. Although on occasion, I gaze wistfully at friends who are bored with their work but can come home, put up their feet, drink a beer and forget all about it.
What do you think? Where do you find the balance between work and passion?
