Laid Off? Health Insurance Options

It’s tough to live on reduced income after a reduction in hours or a job loss, but unemployment benefits can help to bridge that gap, at least for a while. The expanded eligibility and expanded benefit amount provided through federal legislation in response to COVID-19 has helped thousands of Iowans.

Losing employment (or even reduction in hours) often means that workers also lose their health insurance coverage. Depending on the situation, that loss may be even more disruptive than the loss of income. Fortunately, there are some good options available for obtaining affordable health insurance outside of your workplace.

Free Insurance. If your income is below a certain threshold, you may be eligible for free health coverage through the state, and you can apply at any time during the year. This coverage is available to everyone, regardless of whether they are disabled or have children in the home, thanks to the fact that Iowa signed on to the expanded Medicaid portion of the Affordable Care Act.  The income guidelines for this option depend on family size:  for a single individual, the 2020 income limit is nearly $17,000; for a family of four, it is nearly $35,000. There are some nuances in the recording of income, so even if your income is a little above the limit, it is worth applying – you may be eligible. ALSO – even if your income for the first six months of the year puts you over the limit, it is still worth applying if your situation has changed, because the income limits are considered on a month-by-month basis. To apply, contact the Department of Human Services at 855-889-7985.

Coverage for Children. Through Healthy and Well Kids in Iowa (Hawk-I), children and teens under age 19 are eligible for free or nearly-free health coverage up to much higher income levels, so if you are having trouble affording health insurance for your children use the same DHS phone number (855-889-7985) to inquire and apply.

Income too high for free coverage? There are still options! The high cost of health insurance often means that even those with average incomes may find it unaffordable. Through the Health Insurance Marketplace, you can find high-quality health insurance plans; you may be eligible for help in paying the premiums if you do not have access to an affordable employer plan and if your income is below a generous limit. The 2020 income limit here is $49,960 for a single individual, and $103,000 for a family of four. You will be expected to pay part of the premiums, based on your income, but the government will pay the rest. The Kaiser Family Foundation’s Health Insurance Subsidy Calculator will provide a good estimate of the help you might receive.  

To enroll mid-year in coverage through the Health Insurance Marketplace, you must be eligible for a special enrollment period; generally that ends 60 days after your previous coverage ends. Learn more or enroll at www.healthcare.gov or by calling 800-318-2596. Many community health centers offer assistance in considering options and enrolling, as well. 

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Food Assistance and Increased Options

With job losses skyrocketing because of the coronavirus pandemic, hunger is a growing issue for many Iowans. To help alleviate some of the stress, the Department of Human Services requested an addendum to the state plan for The Emergency Food Assistance Program (TEFAP). The addendum has allowed for increased access to food distribution to address food insecurity related to the COVID-19 pandemic. Iowans who qualify for food assistance can receive increased funds – and in April and May, that total monthly benefit was $646 for a family of four!

Iowans who are in need of food should call 2-1-1 or contact their local food bank to find TEFAP providers in their area. There are also increased options to use food assistance funds to purchase food online. Some retailers like Walmart and Amazon now accept Electronic Benefit Transfers (EBT) and Amazon is able to deliver to all zip codes in Iowa.

The fastest and easiest way to apply for benefits is to complete the online application located at: https://www.dhs.iowa.gov/how-to-apply. If you don’t already have Food Assistance benefits, you can apply anytime in June and if you are eligible, you will get the full monthly maximum amount of benefits for your household size.

Food pantries might be another option to make ends meet during this crisis. Food pantries are permanent sites that store and distribute groceries to people in need. They are commonly located at community centers, faith based organizations or other sites. Many food pantries have set distribution hours, so it’s best to call before you visit. You can check the website FoodPantries.org for local pantries near you.

Many communities in Iowa offer Mobile Pantries. These might be monthly, bimonthly or quarterly food distributions and are often operated by the Food Bank of Iowa. Community partners throughout Iowa set up these farmers market-style distributions. You can check mobile pantry schedule for a list of all our mobile pantries, or find a mobile pantry near you on the food resources map.

The summer food service program (SFSP), administered by the Iowa Department of Education, offers nutritious meals and snacks to school children ages 18 and under during the summer months. You can check the Iowa Department of Education website for local information, https://www.educateiowa.gov/pk-12/nutrition-programs/summer-food-service-program

Soup Kitchens and Meal Sites prepare and serve meals to people in need on a regular basis. Most soup kitchens and meal sites have set meal times on a daily, weekly, or monthly basis so again, be sure to call before you visit.

If you are farm family, whose operation has been directly impacted by the coronavirus pandemic there is assistance available through the Coronavirus Food Assistance Program. This program can provide direct relief to producers who have faced price declines and additional marketing costs due to COVID-19. The USDA is accepting applications through August 28, 2020, more information can be found at https://www.farmers.gov/coronavirus.

Guest Blogger: Mary Weinand
Family Finance Field Specialist
Iowa State University Extension
Guest Blogger
Mary Weinand
Family Finance Field Specialist
Iowa State University Extension and Outreach
Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Meat Rations

My local grocery store announced that they will limit fresh meat purchases to four items for the current time. Many grocery chains have set limits to prevent shortages. The slowdown of processing at meat packing plants has made this step necessary to balance supply and demand.

I called the meat department for details. A prepackaged retail item counts as one item. Meat case items can be bundled: for example, if I request 5 pounds of ground meat and have it wrapped in 1-pound packages, the five will be over-wrapped with one price tag and count as one item. Canned meat items, including tuna, salmon, spam, etc., do not count toward the purchase limit. Be sure to check with your local store; their policies might be different.

Eggs, peanut butter and beans are nutritious substitutes for red meats and poultry.  Stores may also be marketing institutional cuts. These are larger pieces of meat such as whole loins or rump roasts that can be cut into individual servings and frozen. Another approach is to cook the large cut, then divide the meat into packages appropriate for recipes that call for pre-cooked meats. To freeze meat for later use, place it in a plastic freezer bag and over-wrap with heavy foil or freezer paper. Be sure to add a label with date.

Cutting back on serving sizes or using recipes that stretch the protein content are other solutions.  Stir-fry recipes put more emphasis on vegetables. Rice, pasta and beans in a recipe may make it possible to reduce the amount of meat or poultry to ¾ or ½ the amount in the original recipe and still supply adequate nutrition. Low cost, protein-stretching recipes are available at the Spend Smart Eat Smart website.

To extend the quality of raw meats in your refrigerator, store the cuts at 40 degrees or less.  The meat drawer is designed to provide the ideal conditions for storage. The temperature in the freezer compartment should be zero degrees or less.  If your refrigerator does not have an internal thermometer, you can purchase one at appliance or hardware stores. 

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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If You Don’t Need It, Don’t Buy It

As we experience consumers’ hoarding of a few items like toilet paper we might be under the impression that we’ve fallen on “Tough Times.”  Powerful memories exist for my senior parents who lived during World War II, when rationing meant you couldn’t always buy a wide range of the things you wanted. Like many Americans they learned and practiced “If you don’t need it, DON’T BUY IT.”

It might sound like the advice of frugal parents, “If you don’t need it, DON’T BUY IT,” but to meet the needs of US soldiers during World War II, commodities in short supply had to be rationed.  So in 1942 Americans back home were given numbered ration books with stamps inside to control people’s consumption of things like coffee, fuel and shoes and provide equal distribution of scarce goods.

A person could not buy a rationed item without also giving the store the right ration stamp.  Once a person’s monthly ration stamps were used up, they couldn’t buy any more of that type of product. It was like being on an allowance.  

This meant planning carefully, being creative, not wasting and self-control. My father’s ration book represents just one way in which World War II changed the spending behaviors of families.

So, what of these valuable consumer behaviors can we practice today? Do I have a list and know what is already on hand at home before shopping? Can the “If you don’t need it, DON’T BUY IT” ideal give me confidence to wait during a temporary product shortage? How might my kids, family, friends be encouraged by a different perspective than what they are seeing happen?

My grandparents and parents, like many American households, learned and practiced modest family living, to do without and to sacrifice for the common good because “If you don’t need it, DON’T BUY IT.”

Being guided by the rule “If you don’t need it, DON’T BUY IT” printed on American’s WWII ration book covers could prove to be a life lesson for the historical event that impacts us all these days.  The ration book of my 82-year-old father, a Soil Conservation Contractor and Southeast Kansas farmer, re-appeared this week as he continues to live by the motto “If you don’t need it, DON’T BUY IT.”

Guest Blogger: Carol Ehlers, Human Sciences Finance Field Specialist, Iowa State University Extension and Outreach.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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When Income Goes Down…

bar graph showing 7 months income and expenses; first month income and expenses equal, then income suddenly drops, while expenses decline slowly, until in the seventh month they are in line with lower income.

When income goes down, it often goes down suddenly – one month it is normal, and the next month it is suddenly much less. People may be much slower to reduce their expenses, often taking many months until their expenses are finally in line with their new (lower) income. Why? Denial, unwillingness to modify their lifestyle, lack of needed skills, or other reasons.

That slow response will, unfortunately, delay their recovery and increase their financial problems. The graph (above) depicts a family whose income declined by $800/month. It shows five months where the family’s expenses continued to exceed their new income. During those five months, their spending exceeded their income by a total of $2,000.

Where did that $2,000 come from? Perhaps they had an emergency savings account – if so, the balance in that account is now depleted. If they, like many Americans, had no savings, then they had no choice but to go in debt — they may have made partial payments on some bills, or built up the balance on their credit cards. They are $2,000 in the hole. And while it only took a few months to get into that hole, it may take years to repay that $2,000! (or to rebuild their savings)

The second graph depicts the same situation, but in this case the family rapidly reduced their spending to match their new income. This family also spent more than they earned, but only in the first two months, and only by about $500. They will recover much more quickly from this financial setback.

Reducing expenses isn’t easy. But in the long run, people who quickly adjust to the new situation are more satisfied with the outcome. Even in situations where the income reduction is expected to be temporary, people who adjust quickly come out of the situation in a stronger financial position.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Choices: Cut to the core

When you face unfamiliar financial stress, the choices are difficult. But they are still choices – and we know how to do that. We’ve been making choices since we were small children deciding what book we wanted for a bedtime story, or which treat to order at the ice cream store.  I know – these days we would LOVE to face such simple choices, right? Sometimes the key to dealing with difficult choices is to make them more simple — cut through the extraneous details and get to the core of it.

Faced with a budget shortfall, the hard truth is that we no longer have the money for the lifestyle we enjoyed in the past. To put it simply: I can’t still have everything. So which do I need and want the most?

Think about something special to you – maybe it’s a monthly subscription, or your favorite soda or beer, or planting flowers in your pots and your yard. Whatever this special thing is, we’ll call it  your “treasure.” It’s hard to give up. But ask yourself: would I rather have “my treasure” or running water? If the answer is running water, then you’ll pay the water bill. Would I rather have “my treasure” or keep my car? Your financial decision will follow your answer.

Sometimes we say “I was FORCED to give up ‘my treasure.'” But it’s not really true. We could have kept the “treasure” and given up something else. We kept the “something else” for a reason. Instead of feeling defeated and deprived, we can feel PROUD of the decision we made. We gave up something less important in order to keep something more important.

Looking at the bare facts can help us feel a little better about choices we wish we weren’t facing. Simplifying makes some things really clear.

Really? Of course, it’s not always as simple as I’m trying to make it. Sometimes we have more options. Perhaps I can keep “my treasure” and just delay my car payment. That means I’m choosing to make extra payments later. In order to do that, I need to be REALLY certain that my income will go back up sometime soon. – it’s a risk. Having the option to delay or make partial payments dilutes the simplicity I’m trying to convey. After all, real adult life IS more complicated than childhood decisions.

Even so, if we cut through some of the static, we get down to the bare choices. It’s always about choosing what is most important to ourselves and our families. Sometimes it’s also about carefully weighing future risks and deciding if we’re willing to take them. If we choose to take on the risk of extra payments in the future, we know we need to start now to plan for them. Accepting that reality is also part of cutting through the details and looking at the core of the decisions we’re making.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Prioritizing when money is tight

Audio Blog
Weighing Priorities

As we focus on what we can control in our personal finances, the most obvious thing we control is our spending. When money is tight, choosing your top priorities is critical. Prioritizing includes expenses like groceries, household supplies and personal needs: think about needs vs. wants and use your limited funds on the things that truly bring value to your family. Prioritizing can be even more important when it comes to paying bills.

Before going to the point of skipping a bill or making a partial payment, start by getting a complete picture of all your bills and debts – total owed, monthly payment, current standing (i.e. are you currently caught up), and interest rate or fees for late payment.

Then consider each bill’s importance. They will all need to be paid eventually, and it is never desirable to leave bills unpaid or partially paid, but in times of real financial shortfall, people sometimes have no choice. So how do you choose among your many bills?

Consider what you have to lose if a bill is unpaid. Losing housing, core utilities or a vehicle is generally the greatest possible loss to a household – therefore those payments may be top priorities for many families. By contrast, getting behind on a credit card account, student loan, or medical bill payment plan may not affect your immediate well-being. Note: it may affect your credit score, and is not something to take lightly, but that is an impact you can recover from.

In addition to prioritizing among your existing bills, it is also wise to consider what bills you will continue to incur. You may have on-going monthly subscriptions – to video services, cable, newspapers, weight-loss programs, wine clubs, (the list is endless). Stop and think about whether to continue them during this time. Those are often things we enjoy, and we don’t like the idea of giving them up, but if you’re worried about paying the car insurance or water bill, then it’s appropriate to include these subscriptions as you consider options.

If your situation has left you unable to pay all your bills, be sure to communicate with those creditors. That is the topic for tomorrow’s post, so stay tuned!

The Consumer Financial Protection Bureau also offers tips for protecting your finances during this time.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Crisis: Focus on what you can control

If you are experiencing financial challenges due to income loss or unexpected expenses during this time of pandemic and shut-down, you’re probably feeling tremendous stress. As always, one key to managing uncertainty and stress is to focus on what you can control. There’s no benefit to expending mental and emotional energy on things outside of your influence, and that energy drain will prevent you from focusing effectively on what you CAN do.

What do you have control over? Perhaps more than you realize. You control what you do, including what bills you pay and what money you spend. You may even control the option to return purchases you haven’t yet used!

You control what you say, including to your family members and to your creditors. You also control your attitude — keeping a positive attitude focused on problem-solving will help you be open to new ideas and opportunities.

What do you NOT have control over? Prices. Your past behavior (such as building up credit card bills). The stock market. Your employer (although you may have influence – if you do, consider how to use that influence in a productive way). Don’t waste time and energy stewing over these things. They are what they are. You have choices about how to respond.

Stay tuned the rest of this week for 3 more posts about managing through a challenging time.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Time to refinance?

cartoon house

The uncertainty (almost chaos) that we are experiencing due to the current pandemic is hurting the economy, and is a pointed reminder of the need to plan for short- and long-term financial security. Because the Federal Reserve Board has lowered interest rates, however, there is one group who might be able to benefit from the situation: those who have a mortgage at an interest rate higher than they wish.

            How do you know if refinancing is a wise choice for you? Unfortunately, I don’t have a simple answer for that question, but I can give you a few tips on how to evaluate the decision. First, two generalizations. Consumers who are most likely to benefit are those who:

  1. Have the highest interest rates on their current mortgages; and/or
  2. Have many years left to pay on their current mortgages.

Why? Because the main benefit of refinancing is to pay less interest on your mortgage over the long term. The total interest you pay depends on the interest rate and the length of time on the loan, along with (of course) how much you owe.

            If it were free, everyone would benefit from refinancing when interest rates drop, as long as they did not lengthen the remaining term on the mortgage. However, refinancing is not free. Lenders will charge closing costs that will include a loan origination fee, along with appraisal fees and other fees. Note: fees may be lower if you stay with the same lender that holds your current mortgage, but will generally be equivalent to 1-3% of the amount of the loan. If your refinance will cost $2,000, then it is only worthwhile if you will save noticeably more than $2,000 in the long run.

            Imagine that you took out a 25-year mortgage several years ago at 4.25%, with a monthly payment of $560 plus taxes and insurance. The current balance on the loan is $78,000; it will be 16 years and 1 month till it is paid off, and you will pay $29,686 in interest during those 16 years. 

  • What if you could refinance at 3.5%?  If closing costs were $2,000 and you borrowed the money to pay those costs, then you would be borrowing $2,000. You could get a 15-year mortgage with a payment of $572 (plus T&I); the total interest you would pay would be $22,938; that would save you over $5,500 in interest! Of course your payment and savings would be lower if you paid the closing costs in cash.
  • Even better, refinancing at a 3.0% rate (15 years) would lower your payment on an $80,000 loan to $553 (plus T&I), and reduce total interest to $19,419, for a total savings over $10,000.

A caution: Refinancing only makes sense if there is no penalty for pre-paying your existing mortgage. Iowa law prohibits pre-payment penalties, so for Iowa-based loans it’s not an issue, but it is an issue to be aware of in other states. For more information, explore the Consumer Financial Protection Bureau web page on mortgages.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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A Missing Link in Your Spending Plan?

checking a box

Making a spending plan is a key to being on top of your finances. When you look at the income you can realistically expect and then decide in advance how you want to spend it, that plan puts you in control; it helps you ensure your money is used where it matters most.

But is a spending plan all you need? The answer is a definite NO. Lots of people make spending plans but still don’t gain control. Why?  Because even the best spending plan is useless if you don’t FOLLOW it. And that doesn’t happen automatically. You need a strategy.

The good news is that for most people, part of their spending plan is easy to follow; fixed expenses like rent and other bills are predictable, and are usually paid just once a month. The tricky part for most people is staying within their planned limits for flexible expenses (groceries, fun, etc).

It comes down to questions like this:
If you plan to spend $320 on groceries for the month, how do you make sure you don’t spend more than that?

The answer? Keeping track. The only way to make sure you follow through with your plan is to have a strategy for checking up on your spending throughout the month. There are “old-fashioned” ways to do that, like writing down spending in each category, using either written ledger charts OR computerized spreadsheets. The “envelope method” also can help you follow your plan; it involves separate envelopes containing cash for each category of spending you wish to monitor (groceries, gas, fun, etc).

There are also “apps” that can help you track. These apps work in a variety of ways: with some, you enter your spending in your mobile device as you go along; with others, your debit card spending is linked to the app, so that, for example, all purchases at the grocery store are automatically added to your running total of food expenses.

The money management apps for mobile devices are generally provided by commercial organizations, and Extension does not recommend commercial products, but consumers have found many of these apps useful. One caution I suggest, however, relates to internet security when accessing your financial accounts. Choose settings within the app that will prevent the app from connecting to your bank account via open public wi-fi.

Tracking your spending, especially in the categories where you are most at-risk of exceeding your planned amounts, is the best step you can take to make your spending plan work. And that is the way to achieve your financial goals!

For more information, find our free 4-page publication “Tracking Your Spending.”

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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