If you’ve been following my blog for sometime, you know that I’m relatively open with what goes on in the Storjohann household in terms of finances. Some may think it’s weird, but I think it adds a level of transparency and ultimately shows that I, like everyone else, have my share of financial roadblocks. The below post is not meant for everybody. It’s a very specific post that I’ve felt compelled to write for some time and targets an issue that many couples today are facing, but that most also will never encounter. So feel free to read on if it applies, if you’re curious, or if you think there’s someone you know who may benefit. Approximately one in eight couples experience some form of infertility issues. My husband, Brian and I contribute to this statistic. When Brian and I first married, he was gung-ho to get on the baby-making-train right away. I however, was hesitant. I wanted to build my career, to travel, to have freedom… you name it. It took a few years for me to come around, but when I was finally ready to start a family, it… well, it wasn’t happening. After the obligatory year of trying, the “don’t stress” comments, the “just get drunk” comments and more, we started the round of tests to see if there was an issue. And to our surprise, there was. What proceeded was a yearlong adventure through the world of treatments, prescriptions, roller coaster hormone rides, and an IVF cycle, which ultimately culminated in a pregnancy as I’m now about 28 weeks along. The world of infertility is a scary and complicated place. The word itself is taboo and makes people feel uncomfortable. Add that in with the issues people have in being comfortable with their finances and you typically have an icky situation. Coping with the treatments, terminology and outflow of cash can be a stressful time. Here are the ways we handled it in our household (on the financial front) and what I’d recommend to anyone facing down the same beast.
Step 1: Stop. Breathe. Call Your Insurance Company
Upon receiving the referral or recommendation to consult with an infertility specialist, that is your cue to pick up the phone and find out every detail you can about your coverage. What’s covered and what isn’t? Are diagnostic tests included? Prescriptions? Treatments? The consultation with the specialist itself? You won’t have a lot of details to give your insurance provider at this point (aside from possibly knowing part of the issue behind the referral), but it will help to understand the amount of coverage you may or may not have with treatments. Questions to Ask:
- Which procedures require preauthorization?
- Does preauthorization need to be done for each cycle of treatment and how long does it take to get?
- Are there restrictions on the type of healthcare provider who can perform infertility services?
- Are there limits to the number of procedures or the maximum dollar limit on benefits?
- Is there a co-payment for medical services?
Step 2: Schedule and Attend Your Consultation (Bring Your Partner and a Notebook)
I can’t stress enough how important it is to bring a pen and paper and take COPIOUS notes during this meeting. There is going to be a lot thrown at you. Do not attend this meeting without a partner and any appointments or meetings without a buddy, especially in the initial weeks of appointments. You’re going to be overwhelmed with information so it’s important to ensure you have someone else there asking the questions that need to be asked and getting clarification. Brian did a lot of the note-taking while I asked a lot of the questions. This allowed us to ensure we covered and documented everything.
Step 3: Ask (More) Questions
Most fertility clinics have a variety of departments they send you through. The doctors make the medical recommendations, but don’t discuss the finances. The nurses and assistants do scheduling and hold appointments, but also don’t discuss the finances. There’s a distinct department for that and you’ll likely need to hold your questions around the money until you get shuffled into the appropriate office. This is where it’s incredibly important to ask the doctor about the following in regards to your recommended course of treatment:
- What diagnostic tests are needed?
- What prescriptions are specifically involved and the quantities?
- What is the breakdown of steps in the treatment?
- How many cycles are being recommended in your treatment plan before another course of action may need to be considered?
- What are the next steps if the recommended course doesn’t work?
Once you have the breakdown of the recommendations, you can then sit down with the financial consultant and begin to review costs. Ask about every line item and detail and ensure you have a dollar figure next to each prescription, treatment and test. Don’t worry about crunching the numbers while you’re there. You can process that when you get home.
Step 4: Call Your Insurance Company (Again) and Do That Question Asking Thing
Once you’re back home and able to process, it’s time again to make the call to your insurance company again and ask more detailed questions about your recommended course of treatment. (I swear I had Tricare on speed dial by the end of this).
- Is there a co-payment for drug coverage and is prior authorization required for these medications?
- Does the plan cover self-administered subcutaneous (under the skin) or oral medications?
- Are there discounts for mail-order medications?
- Will the treatment/procedure/medication be covered under my current coverage or under my major medical portion?
- If yes, is there any limit of any kind-dollar amount or number of attempts? If no, are any portions of the charges covered for prescription medication, laboratory tests or ultrasounds leading up to treatment?
Note: Creating spreadsheets to track all of the numbers is totally fine and recommended. We especially did this when it came to shopping around for the best prices on our prescriptions for IVF. We’re talking hundreds of dollars saved by making a few phone calls.
Step 5: Have a Glass of Wine, Cup of Tea or Take a Walk
At this point you’re probably so worked up and boggled down by numbers, recommendations and unknown vocabulary terms that you need to unwind. Take some time to yourself to get away and clear your mind. Everything will be there when you get back and it’s best to de-stress in the midst of all this so you can think clearly as to what’s best for you and your family. Girls’ nights, date nights, letting the tears (and hormones) flow and late night calls with my best friend helped me immensely through this process as did building Workable Wealth and working with couples across the country to help them meet their goals. Determine what will help you cope on the road ahead and allow yourself time to process.
Step 6: Review Your Financial Situation
Now that you have a general idea of what the treatments will cost you with and without insurance, it’s time to look at your own personal financial situation. Specifically, you’ll want to review:
Determine where you currently stand in these areas. If you’re not the kind of couple that has a budget in place, now is certainly the time to take action in that category. It’s going to be incredibly important to understand where your money is going in the months ahead.
Step 6: Prioritize
There isn’t a price that can be put on building or starting your family. Each couple and situation is unique and you have to determine where this phase and step falls on your list of priorities. If you are currently saving up for a home down payment or a big trip, is that money that you’ll reallocate towards the medical payments for treatment? Perhaps you’ll cease making contributions and reallocate any future savings amounts towards your family planning goal. What are you willing to trim back on in order to go down this course and make room for the expenses? Only you can decide that.
Step 7: Create a Plan
Now that you’ve reviewed and prioritized, it’s time to put together a plan and determine:
- How much do you currently have in savings that you can allocate towards payments without wiping out your emergency fund? Remember, this isn’t an emergency (as much as it feels like one).
- What areas will you be cutting back on in order to save more for treatments?
- Will you open up a separate savings account to handle all expenses and treatments?
- If you don’t have the funds on hand to currently cover the costs, will you continue to save and build up your cushion or will you finance the expenses?
- Should you obtain a second opinion and perhaps shop around for more affordable (but still quality) care?
Step 8: Review the Fine Print on Lending
Should you choose to go the financing route, consider if loans from parents or a family member may be feasible or affordable first. Your doctor’s office will likely have a recommended lender, but be weary of high interest rates and any kickbacks your provider may receive for recommending them. Shop around for better loan terms on your credit cards, personal lines of credit from the bank and consider other creative ways to fund the treatments if you’re insistent on borrowing. Remember the higher the interest rate, the higher the amount you’re tacking on to what is likely already a four or five-digit number. Do your research here!
Step 9: Get Creative, Start Saving & Make Adjustments
Fertility treatments are by no means a walk in the park, but if you’re being forced to spend money and it is money that you may already have set aside, take advantage of the costs by using a credit card that will earn you points towards travel or cash back. We would put all of our medical bills on our credit card and then immediately transfer the money from our savings to make a payment. This allowed us to stock up on travel points that we’ve cashed in for trips over the past few months. Now is the time to open up a separate savings account for this goal and set up your automatic monthly transfers. If you’re not using mint.com already, you should have your accounts synced up and be closely monitoring the areas you’re cutting back in.
Step 10: Stay Flexible, but Know Your Limit
There’s no straight path or guarantees when it comes to what will work. Our path lead us from the DIY route, to some prescriptions, to IUIs, to more prescriptions and giving myself shots, to IVF. (Imagine the dollar amount climbing exponentially here.) We were flexible, but we had a limit and one round of IVF was it for me – physically, emotionally and financially. If it didn’t work after one round, adoption was our route and we were okay with that. As mentioned previously, you can’t put a price on building a family – but it is important to know your limit. How much is too much money and/or too much time spent in these areas? If a treatment is not working, it may be best to take a physical and financial break and circle back when you have the funds built up again. It’s hard to keep the numbers in mind with such an emotional issue, but as it goes with many things with your finances, you shouldn’t put all of your eggs in one basket. While you may want to throw everything you can at this goal (which could work for a period of time), you can’t let it wreck financial havoc on your life. Remember to simultaneously continue saving for retirement, work back into stashing away in your travel fund and take time to dream and plan for other goals you have as a couple as well.
Preparing for parenthood? When you’re expecting a baby, it’s easy to focus on the excitement and joy caused by your growing family. But don’t get too caught up in decorating the nursery just yet. Getting ready for your new arrival involves a number of practical steps to take – and that includes taking a look at things like insurance. Having a baby is a huge medical and financial event, and it pays to be informed about your insurance options.
Understand Your Company’s Parental Benefits
If you work outside the home and intend to return to your job after the birth, you’ll need to understand your company’s parental leave policy. You also need to know what benefits your employer offers new parents. If you’ve worked for your company for over a year and the company has 50 or more employees, the Family and Medical Leave Act applies to you. The FMLA dictates that parents (both men and women) are allowed 12 weeks of unpaid family leave after the birth or adoption of a child. Your employer must also pay their usual contribution to your health care costs during your leave. There are a few exceptions: your employer can deny this leave if you’re in the top 10% of wage earners at the company, and the company can prove that your absence would substantially harm the business. You’ll also want to check with your company to see if you are covered by short-term disability insurance. Birth mothers are entitled to short-term disability income if the company pays disability benefits in other circumstances. If your employer doesn’t provide short-term disability insurance, you might be able to obtain independent disability insurance. Most companies do require some time between starting a policy and getting pregnant. Many employers provide more leave and more pay than that offered by the FMLA, so make sure to check in with HR to get the full scoop. At a minimum, you must notify your employer thirty days before taking time off under FMLA.
Learn the Ins and Outs of Your Medical Insurance
With the passing of the Affordable Care Act, the vast majority health insurance plans cover pregnancy and childbirth. This is true even if you become pregnant before your coverage begins. You can change plans mid-pregnancy if you don’t like your health insurance plan, but there are usually specific open enrollment periods. The only exceptions are a few grandfathered individual health plans — plans bought individually, not through an employer. If you are on a grandfathered plan, you’ll have to investigate their maternity benefits to understand your options. Pregnancy must be treated as any other medical condition, but the specific details of your policy will determine your out-of-pocket expenses. Make sure you understand your deductible and copayments to estimate your costs. Check with your insurance company to understand your options with prenatal tests, prenatal care, birth settings, labor support, breast feeding support, and neo-natal care. Now that you understand your medical benefits during pregnancy, you’ll also want to make sure your child is covered after birth. Having a baby qualifies you for a Special Enrollment Period (SEP). You can enroll or change your health insurance coverage even if it’s outside the open enrollment period. The coverage can be effective as of the baby’s birth date.
Provide for Your Family with Disability Insurance
Now that you have a child that depends on you financially, you might want to consider long-term disability insurance. Over 25% of Americans will be considered disabled for some period of time before reaching retirement age. That’s why it’s important that those family members earning an income protect their ability to work and earn an income for your family with long-term disability insurance.
Safeguard Your Family with Life Insurance
No one likes to think about worst-case scenarios. If you feel talking about the need for life insurance is too morbid during this happy time, flip your mindset. Remind yourself that taking out the right coverage is to protect your child no matter what happens. Term life insurance is the most cost-effective option and you’ll want insurance for both parents. Even stay-at-home moms and dads need life insurance – if something happens to a stay-at-home parent, a working parent will need additional childcare support. Remember to update your will to specify who will serve as the guardian of your child if you and your spouse were to pass away. You can name someone else to handle any assets passed on, or you can establish a trust. A minor is unable to receive a life insurance benefit directly, so it’s important to specify who will manage the benefit. Even though dealing with insurance can be unpleasant, take the time to understand your options. By understanding your insurance benefits ahead of time, you can set your financial concerns aside and concentrate on the arrival of your new baby.
#YOLO (You Only Live Once) has become a hashtag phenomenon in twitterverse that is often accompanied with some ridiculous behavior. I decided it could use a #responsibleYOLO spin, followed by some solid advice.
Life Insurance is an often ignored and under prioritized need in one’s financial situation. However, it couldn’t be more important to protect your family and I’ve seen the results that not having appropriate insurance can have – even in your 20s and 30s. Ultimately, obtaining the appropriate amount of life insurance is not about you. It’s about your family and making sure they’re protected in case something happened to you. As a GenYer, if you are married and/or have children that are dependent on your income, how would your salary be replaced in the event of your death? Would your spouse be able to maintain the household expenses? What about the mortgage payment? Whether you are the main breadwinner, contributing a portion of the household income or staying at home with the kids, there are contributions you are making, whether financially or in the form of a “value” provided through the activities that you perform, which should be protected. Below are some items to consider when evaluating the amount of life insurance you need:
Income Replacement & Timeframe
How much income would your family need if something were to suddenly happen to you and for what time period? For example, if you’re 30, married, and have a child at home, you may need your life insurance to cover costs until your child is 18 and then until your spouse retired at age 65. This includes amounts they would need to maintain lifestyle and household expenses. Be sure to account for other income sources available such as your spouse’s wages, interest and dividend payments, etc.
Consider the outstanding balances on any mortgages, car loans, student loans and any other types of debt. Total these values and incorporate the number into your life insurance face value. Being able to pay off these balances would decrease the income replacement percentage that your spouse or family would need if they lost your income.
If you’re planning to pay for all or a portion of your children’s college expenses, it’s best to look up the average cost of college in today’s dollars. According to Savingforcollege.com, the cost of a 4-year degree at a public university for those with in-state residency is $37,800 (not including room/board, books and other fees). Start by incorporating today’s costs into your policy and reevaluate over time. If something were to happen to you today, the proceeds could be invested and allocated in such a way to grow and keep up with future expenses.
Depending on the type of service you want, final expenses can range from a few thousand to $15,000+. The FTC offers this guide for pricing out and comparing the costs between different providers and options. A general rule of thumb is to include $10,000 – $15,000 in the face value of your policy to cover final expenses.
Current Asset Level
Be sure to consider any amounts that you already have stocked away such as savings accounts and money markets, 401(k)s, IRAs, Roth IRAs, stocks, mutual funds, etc. These are assets that will also grow overtime and help to supplement income needs.
The Value of What You Do
Even though one spouse may stay at home, there is still value provided through activities such as childcare, housekeeping, yard work, and more that would have to be replaced by either the surviving spouse taking over or paying for daycare, gardening or housekeeping services. Be sure to incorporate these expenses into your life insurance needs estimate. Keep in mind that the amount of life insurance you and/or your spouse need will change over time as your situation changes. With family additions, home purchases and upgrades, income level fluctuations and more, the amount of your insurance coverage should be evaluated on an annual basis at a minimum or immediately after a change to your financial situation. Like what you read? Sign up for the Workable Wealth community for more tips and resources and receive 9 Steps to Workable Wealth, a free guide to help you kick start your financial journey.
The decision to start a family is one of the biggest and most important choices you’ll ever make. It’s usually accompanied by joy, stress, excitement, and an array of questions surrounding your physical and financial house. As new parents, not only will you be faced with a list of items and products to purchase and compare, but you’ll also need to ensure you have a plan in place that addresses your spending, your estate, and your insurance coverage to ensure that your new family is taken care of.
When planning for a baby, below are 3 financial considerations to review to ensure you’re prepared:
Spending & Savings Plan
According to this article, it will cost the average middle-income couple $241,080 to raise a child that was born in 2012 (not including extras like sports or club involvement, private schools, dance classes, etc). That’s a quarter of a million dollars – per child! Of course, it’s not a bill that will hit you at once, but will happen over time. In order to alleviate some of the financial stress or strain that may come along with it, take some time to get the following in order and update your family budget:
- Emergency Funding: Build up your emergency saving to include 3-6 months of living expenses. Err on the side of caution if only one of you will be working and build up 6 months of reserves.
- Groceries: What will your expenses look like with diapers, formula and baby food in the mix? Start pricing these items out and understand if and where you’ll need to make adjustments.
- Transportation: What does your current car situation look like? Do you have safe and adequate room for a car seat? Will you need to put aside money for a second or replacement vehicle? If so, now is the time to set a plan in place to work towards this goal.
- Medical Costs: Read the fine print on your insurance policy and call your customer service line with questions. Will your premiums and co-pays increase? By how much? Talk to your employer about tax-advantaged plans they may have in place to assist you.
- Childcare: This report by the U.S. Census Bureau shows that childcare costs have risen tremendously since we were kids. Take some time to check out the costs of childcare in your city, whether it’s daycare groups, individual care or hiring a nanny. Are you or your spouse planning on making the switch to a stay-at-home parent? Be sure to sketch out what your new financial picture will look like.
- College Funding: Are you hoping to assist your children with college? Consider the ever-increasing costs and set a plan to start saving as early as possible. This chart gives a great overview of the savings vehicles available.
Estate Planning No one likes thinking about the possibility of not being around for his or her family, but it is in your (and their) best interest to reflect on the matter and ensure that you are prepared and protected against the unknown.
- Wills: Whether you do or don’t have a Will in place, now is the time to either implement one or review it. Having a Will not only ensures that your assets are distributed in line with your wishes, but it allows you to assign an executor to handle any matters associated with your estate and select a guardian for your children.
- Guardianship: When choosing a guardian for your children, ask yourself who your children would feel most comfortable with and whom you feel would most responsibly and effectively control any funds left to them. Consider the values, beliefs, and overall emotional comfort your chosen guardian could provide to your children. Remember to have a discussion with those you choose and to nominate a contingent should your primary be unwilling or unable to serve.
- Trust: A trust document can provide instructions on how you would like any funds left to your children to be managed and spent. In addition, you can appoint a trustee (also a primary and contingent) to manage the funds.
Risk Management Having the right kind of protection in place is just as important as having a detailed spending and estate plan. Evaluate your existing life, health and disability coverage and ensure that you have the appropriate amount of insurance in place should something happen to you or your spouse.
- Life Insurance: Life insurance is important because it ensures that if your family is faced with the premature death of you or your spouse, the coverage provided by the policy can be used to replace any income lost and ensure they will have enough money to cover their living expenses and sustain their lifestyle. If you don’t have coverage or if you have an existing policy, be sure to consult with your agent on the appropriate amount of coverage for your situation. Items such as income levels, debt load, and existing assets should be taken into consideration.
- Disability Insurance: Disability insurance is an often overlooked, but important piece of coverage. A disability income insurance policy ensures that should you become disabled for a short or extended period of time, you are paid a percentage of your current income on an ongoing basis. These types of policies safeguard you and your family against a complete loss in income.
- Health Insurance: Review your health insurance coverage and ensure you understand the parameters and costs around routine check-ups, prescriptions, premiums, deductibles, and co-pays. If you find uour existing policy doesn’t meet your needs, look into other options available through your employer or agent.
Like what you read? Sign up for the Workable Wealth community for more tips and resources and receive 9 Steps to Workable Wealth, a free guide to help you kick start your financial journey.