Questions About Medical Bills, Motivation, Life Insurance, Soap, and More!

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What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Handling medical bills
2. Motivation for any self-improvement
3. Hanging onto whole life insurance
4. Tablet energy use and savings
5. How retirement funds are distributed
6. Getting Things Done workbook
7. Roll over or not?
8. Ineligible for life insurance
9. Defining a “treat”
10. Thickening castile soap
11. Daily “devotionals” for self-improvement?
12. Politics in personal finance

After an issue with the database that was backing up my tasks (that was somewhat self-incurred), I started shopping around for a new task management tool and have started using Things 3.

For me, the issue is that I now have this specific idea in my head of what I want out of a task manager, and the picture may have become so specific in the last few years that no task manager can really pull off what I want to achieve.

Part of me wants to dive back into computer programming and just write it myself as an app for iOS. Time for a new hobby, perhaps?

Nah, probably not.

On with the questions.

Q1: Handling medical bills

Recently I had an unexpected illness and was hospitalized I have been receiving a few bills already not looking forward to the rest. I do have insurance but obviously it doesn’t cover everything. I was unable to work for 2 months now getting back to work. Thankful for a frugal life with no debt, and a large emergency fund! Do you have any suggestions on dealing with these hospital bills coming in that can ease this short term financial stress.
– David

The absolute first thing you should always do when facing medical bills is the people billing you and negotiate. Medical bills are almost always negotiable and the organization involved is almost always willing to set up payment plans.

Get them on the phone and talk. Ask what you can do to get the bill lowered or to get on a reasonable payment plan ASAP. Be proactive about it. They would far rather work directly with you than to have a bill go to collections.

The fees and billing practices of the medical industry are complicated and often due to complex relationships with the insurance industry, but they are very open to working with people.

Beyond that, make sure you take all of the follow-up and recovery steps very seriously. Whatever your condition, the worst thing you can do is increase the risk of relapse or further complications, as that will just add to your expense (and to your difficulties).

Q2: Motivation for any self-improvement

I think I just generally struggle with any kind of self-improvement motivation. Work just completely burns me out and when I get home I want to eat and do minimum amounts of anything. On days off I just want to do fun stuff. Self-improvement feels like a big burden whether it’s being frugal or exercising or eating better.
– James

My suggestion is simple: choose one big thing you really want to change in your life, then commit to one very specific and very easy daily change that you can do every single day.

You want to curb your spending? Eat one meal prepared at home each day that you would otherwise eat at a restaurant or as a prepackaged food. Skip the takeout and make a pot of soup. (In fact, just make a huge pot of soup in the slow cooker on Monday and eat it all week long.) Skip the frozen meal you bought at the store and instead scramble some eggs. If you do that one meal a day, that’s a win. If you do more, that’s great.

You want to get in better shape? Commit to walking around the block once a day. If you do that, it’s a win. If you feel like doing more, great.

Just find one little thing to do that’s in line with what you want to change about your life. Make it as simple as possible, something you can do in a minute or two or even something you can do passively.

Now, get a calendar and put it up on your wall. You can print off a full year calendar if you like. Each day you do that one simple thing, put a huge X on that day. After a while, you’re going to have a chain of unbroken Xs, and you’re going to find that you don’t want to break that chain. Keep going for a while longer and you’ll find that the chain of Xs don’t matter any more and this habit you’ve been working on is just your new normal in life. When you’re there, start with a new habit.

That’s about the easiest method I can think of for getting started with self-improvement. Choose a single small change, nothing overly grand. Do it every day. Build a streak. Feel good about that streak. Use that as a foundation to move forward.

Q3: Hanging onto whole life insurance

In the recent mailbag, a man asked about cashing in his whole life and going for term life. Would it also make sense to keep the whole life (since it’s paid up and paid for) and then supplement with term?
– Richard

That would certainly be an option for that person (assuming that they have limited payment whole life insurance and thus no longer have to continue paying premiums), but there are a few things that usually nudge me against offering that advice.

One is that limited payment whole life insurance policies generally have a weaker annual rate of return because a portion of that return is used to continue to effectively pay the premium. In short, while it’s an investment that you don’t have to continue to put money into, it’s not earning a great rate of return.

If it’s not a limited payment return and the person is still paying premiums, the premiums on a whole life policy are high for the insurance you get and it’s a bill that someone who’s struggling financially really doesn’t need.

Another concern is that the money in the account is likely going to come in handy for someone who is struggling with the heavy burden of college debt and entry-level salary that comes with being in their twenties. If the value of a whole life policy can be used to eliminate a significant portion of debt at a point in your life when you’re struggling financially and you’re also pretty young, then cashing out is usually going to be the much better option provided the money is used sensibly.

In general, I follow the advice of Consumer Reports and encourage people to avoid whole life insurance entirely. If you’re older and have had a policy for many years already, you might want to talk to a fee-based financial advisor about whether to hang onto the policy; otherwise, I lean toward cashing it out and using it to cement your financial foundation. If you need life insurance, get term life insurance.

Q4: Tablet energy use and savings

I use an Android tablet for 95% of my computer use and browsing and games. I have to charge it daily. How much energy does this use and how much does it cost? If I were to charge it every day at work and only charge it at home on weekends, how much would I save? How would an external battery figure into this?
– Joel

It depends on your exact tablet model. Go to Settings > About > Battery Information to find the exact capacity of your battery, measured in mAh. You’ll want to convert that number to watt-hours to make the math easier, so use this conversion tool. If you don’t have the voltage information, tablet batteries have a voltage of around 4, very slowly declining as they age down to around 3.5, so throw in 3.75 to get in the ballpark.

Let’s say your Android tablet has a 4,000 mAh battery and you use it all up every single day. That eats up about 15 Wh. At home, 1,000 Wh out of your outlet in your wall costs about $0.14, depending on the area. So, if you were to fully charge your tablet at home every single day for a full year, you’d use 5.475 kWh, or about $0.77 of electricity. Seriously.

In other words, charging your device at work every day, Monday through Friday, 50 weeks a year, saves you about $0.50 versus charging it at home.

The external battery I use most of the time, an Anker 20100 mAh battery, gobbles about 75 Wh when I charge it, costing me roughly a cent per charging. Yeah, I’m not too worried about it.

Q5: How retirement funds are distributed

Could you discuss required distribution of retirement funds at 70 1/2 in Michigan? We will be facing this soon and need information.
– Denise

It depends on how exactly this money is invested, which isn’t clear from your message.

If that money is in a 401(k) account, you have to start withdrawing money each year once you turn 70 1/2. There is a required minimum amount that you have to take out each year that’s related to your age and to the balance of the 401(k) account – generally, the older you get, the larger the portion of your account that you must withdraw. At first, it’s around 4% of your account balance and it goes up little by little each year – when you reach 90, it’s around 9%. You can choose to withdraw more if you wish. The company that manages your 401(k) will be able to calculate that required minimum distribution for you, so them; they’ll likely be able to just automatically put it in your checking account for you and may have payment plans where the amount is put in monthly, and they will withhold a portion for income taxes for you, too. It’ll be just like getting a paycheck.

If you’re in one of the Michigan retirement plans, the Defined Contribution plan is almost exactly like a 401(k). The Defined Benefit plan works like a traditional pension, where you are paid out a certain amount each month depending on your years of service to the state – again, much like a paycheck.

It is most likely, based on your question, that you have a 401(k) of some kind and you’re going to need to start taking withdrawals from it soon. Your next step would be to simply the company that runs your 401(k) plan and discuss how they handle required minimum distributions. Most likely, it will merely be an amount that appears in your checking account regularly with the taxes already withheld for you. You can then do with that money whatever you wish – if you’re hoping to pass it on to descendants, look into putting that money into 529 college savings plans if they’re not of college age yet, for example.

Good luck!

Q6: Getting Things Done workbook

Loved your earlier series on Getting Things Done and Making It All Work. Saw the Getting Things Done workbook the other day. Is it worthwhile? I had a hard time actually implementing the systems in GTD as I liked the ideas but it was hard to actually migrate to it without spending a ton of time.
– Marcus

Marcus is referring to two series of posts I wrote a few years ago, one covering the productivity book Getting Things Done and its sort-of-sequel Making It All Work, which I think is about a different topic entirely. The system that the author, David Allen, describes in those books was an invaluable life changer to me during one of the busiest periods of my life, when I had infants at home, worked at a full time job, and was building Money360 as a side gig. I still use parts of the system, particularly the important element of getting stuff out of my head as soon as possible and into a trusted system.

I looked at the Getting Things Done workbook and what it seems to do is break down the book into 20 distinct exercises that ends up with you having a system in place that’s basically the same as the one described in Getting Things Done. For some people, that will be a very good alternative route into the system. It really depends on your learning style and whether the GTD system as a whole is right for you.

I will say this: even if you don’t adopt the GTD system as a whole (I did, for a long while), there are definitely valuable ideas in there you can poach for however it is you keep yourself organized. These days, I don’t hew strictly to GTD and instead use my own system that is made up of a bunch of borrowed parts from GTD, Agile Results, The Checklist Manifesto, and a bunch of other things I learned along the way.

Q7: Roll over or not?

I recently left a job with our county government and have a question regarding a retirement account. I have $4,096 in the NDPERS account. It’s a state-managed account, so it is guaranteed to grow 7.25% every year until I withdraw it and then I would be taxed on the withdrawals. I also have the option to rollover this balance into a Roth IRA. I’m 26 years old. Am I better off leaving the account balance, letting it grow 7.25%, and then being taxed on the withdrawals or should I rollover into my Vanguard Roth IRA, invest in a Vanguard Target 2060 Retirement fund, and have tax-free withdrawals?
– James

From what I was able to read about NDPERS, it’s kind of a wash. The returns you’d get from each option should, in theory, be about equal over that period of time.

NDPERS has the advantage of guaranteed growth. It has the disadvantage of being a pension plan. If you leave the money there, you won’t be taxed until you withdraw it.

A Roth IRA would trigger taxes on the rollover right now. There’s also no guarantee as to what kind of returns you’d get. However, you would have more control over how that money is invested and you could spread out the risk a little, which is what Target Retirement funds do.

In your boat, I’d probably leave the money in NDPERS and start a Roth IRA now. This diversifies your holdings a little – some of it is pre-tax, some of it is post-tax, some of it is in a pension program, some of it is in the stock market, and so on.

Q8: Ineligible for life insurance

I read your recent article about life insurance – and completely agree with it in many ways, life insurance is a very sensible thing to get. However, a lot of people aren’t able to get life insurance – because no-one will give it to them due to various pre-existing conditions. For example, both my wife and I have significant mental health issues, have had issues with self-harm and suicidal thoughts, and my wife has had time as an inpatient in a psychiatric hospital. No life insurance companies will touch us with a bargepole! So what do we do? We have a 2 year old son, and we want to protect him if anything were to happen to either/both of us – but we’re stuck. We have a reasonable amount of savings at the moment, but they’d only pay off around 20% of the mortgage. I feel really guilty when I read articles like this about getting life insurance, and I feel like I’m letting my son down – but it’s not really my fault is it?!
– Sam

It is not your fault. The life insurance company is a for-profit industry and they will issue policies in situations where they are highly confident that the policies will be profitable. There’s an entire academic field devoted to this – actuarial science. The formulas of actuarial science encourage life insurance companies to not offer you a policy, so there you are.

So, what can you do instead? The best thing you can do is to simply be financially smart in your life. Spend less than you earn and consistently bank the difference. Build up a lot of money in retirement and in savings. Eventually, you’ll reach a point where that is your life insurance, in effect – if something happens to you, then that will take care of those who depend on you. If you then have no one depending on you later in life, then you have a pool of money with which to shape your life as you see fit.

You should also think extremely carefully about guardianship. I assume you’ve done so already, but it’s doubly important in your situation. Make sure you have a rock solid guardian who would take your child in the event of something unfortunate happening to you, someone who could provide good care for your child in that unthinkable situation.

It’s worth noting that if something did happen to you and your partner, your home would be sold, the proceeds would pay off the mortgage, and the money that remains would go to your child, so your child would not be penniless.

Take your ineligibility for life insurance as a motivation to make sure that your guardianship planning is great and that you spend less than you earn and save for the future, because if you do that well, you significantly reduce the value of a term life insurance policy for you.

Q9: Defining a “treat”

I grew up in the country and I am often stunned even after 12 years of marriage as to what my husband thinks is normal and I think of as a splurge. Any time we set foot in a restaurant or drive-thru, my mind thinks of it as a splurge because my family went out to eat at a restaurant less than once a month. My husband doesn’t think of it that way at all because growing up they went out to eat two or three times a week. I think of coffee as a splurge because it was something that my parents might drink once a week and they would prepare it carefully with cream and sugar. His parents drank several cups a day so to him it’s basically like water. There are just tons of things like this and I still really notice them and a lot of our marriage seems to be about finding balance between those perspectives. My point I guess is that what you think is a treat is something that another person thinks of as absolutely normal life, and it’s a lot easier to give up a rare treat than it is to change your daily normal routine.
– Abbie

I grew up similarly to you. Restaurants were definitely a rare treat. Simply going into town – meaning any town bigger than the one a few miles away which was mostly a few houses and a bar next to a grain elevator – was something that happened perhaps once a week. I went to middle and high school at a school that was in the middle of the country, surrounded on all sides by cornfields, so I didn’t even go into town for school (my elementary school was in a town, but we rarely left the building).

It’s really hard to relate that kind of experience growing up to people who grew up in large cities. One of my closest friends grew up in an inner Chicago suburb and spent his entire childhood almost never leaving a city environment. Our experiences growing up couldn’t be more different. Yet, we have more than enough things in common to have a strong friendship and I find that those weird differences are usually a source of amusement.

I think, as you seem to have experienced, that such differences are definitely overcome by having lots of other things in common. I do think, however, that a childhood of rural living makes many aspects of frugality easier because they just seem to be the normal way of doing things.

Q10: Thickening castile soap

Saw your mailbag question about looking into Castile soap for various uses and your note about it being too thin when diluted into hand soap. During your experiments, it’s worth your while to consider thickening agents as you make your formulas. There’s a ton of research waiting for you in cosmetics formulation, but xanthan gum and Carbomer are two thickeners that come to mind immediately as safe and effective at low % usage (provided your pH is in the right range). I’d stay away from mineral-based thickeners (silica and bentonite) as they usually require heat and vigorous mixing/grinding to activate. You might also consider making a high viscosity pre-made thickener intermediate to quickly try out a few levels of soap, water, and thickener. I work on paint, and we use that strategy (pre-made, high-strength intermediates) all the time. Also, don’t forget to consider packaging – for example a cheap foaming pump bottle (reuse a store brand soap bottle for $1-2) could turn your thin soap into kid-friendly foam!
– Keith

I’m trying lots of experiments right now to see what works best. It seems to me that the most effective method is to just add a little bit of salt to the diluted soap, which thickens it up nicely. If I put about two tablespoons of salt per five ounces of water, and then use that salty water mix to cut the soap at a 3 parts water/salt mix to 1 part castile soap, it’s nicely thickened. So, if I want to make 32 ounces of this soap mix, I mix about 10 tablespoons ordinary table salt to 24 ounces warm water, then I mix that with 8 ounces of castile soap. I’m still playing with the proportions, but that’s pretty good.

As you mention, foam dispensers are another good solution. If you use a foam dispenser, you don’t seem to need to use salt to thicken the soap, though it does seem to work better if you thicken it just a little. Again, I’m experimenting.

As for cleaning, I find that a 3 parts water to 1 part soap proportion works pretty well for a lot of things (excepting, of course, that it’s pretty runny when using it for hand soap). I’ve been using it even more watered down for things like cleaning windows and surfaces, out of an ordinary Windex-style spray bottle. Again, I’m playing around with it, trying to find easy mixes that work well for me and calculating the cost and effort.

Trust me, there will be a post on this in the future. I’m not 100% sold on castile soap for everything, but it does work well for a wide variety of things and if you cut it with water properly, it seems like you get a lot of value out of a bottle of it.

Q11: Daily “devotionals” for self-improvement?

As a practicing Christian, I read a couple different daily devotionals that are meant to inspire people in their faith. I realized recently that I kind of read Money360 in the same way. It is kind of a daily devotional for improving my finances, and the ideas run nicely in parallel with the Christian devotionals more often than not. I would like to find some other self-improvement “daily devotionals.” Do you know of any or have any recommendations?
– Carrie

I really like The Daily Stoic by Ryan Holiday and Stephen Hanselman. It’s a really good series of short readings on serenity, self-knowledge, and resilience in the tradition of the ancient Stoics.

Of course, almost any self-improvement book can be read in this way. Break any book you like down to a page or two per day. Read that page, think about the main points, write them down in your own words, and reflect on them throughout the day.

Aside from that, I think that well-written websites from independent writers (like Money360) are probably the best source for a self-improvement daily devotional. I’d suggest figuring out which areas you want to improve in your life and find websites on that topic.

Q12: Politics in personal finance

I understand why you keep politics out of your writing (no need to anger half your readers), but I think this article is spot on: Why the World of Personal Finance Needs More Politics @ WaPo and I wanted to get your opinion on it. Most personal finance writers seem to have a rugged individualist/pull yourself up by the bootstraps mentality, but it seems like working politically toward systemic change to make it easier for the average family to get ahead would be a game changer on a level that would seriusly complement the hustling/saving/investing that most readers of your site already do. Thoughts?
– Andrew

I agree with you in the sense that there are definitely some widespread political changes that would have an enormous benefit for many people in terms of their finances. However, there are many reasons why I don’t discuss politics that this article seems to completely miss.

First of all, diving into the political sphere and discussing political solutions to issues moves directly into the opinion section. With personal finance, you can largely stick to numbers and to personal experience. The price on product A is better than the price on product B. This particular strategy worked well for me and here’s the details on that strategy. Many people want that kind of numerical and experiential information. They don’t want opinions that go beyond “this particular method worked well for me personally and you can decide for yourself if it will work well for you.”

Political discussion isn’t like that. Political solutions are never cut and dried – they always have winners and losers, even when we don’t want to see them. There are plans out there that would put money into the pockets of millions, but where does that money come from? You either have to care more about the “money in the pockets of millions” or more about “where that money comes from,” and when you choose a side in that dichotomy, you’re almost always going to end up in argument and often a labeling of the other side as “bad” or “wrong” or even “evil.” They want sources of information where they don’t have to make value judgments beyond “will this work for me personally?”

The personal finance sphere is mostly filled with people who are more interested in the numerical and experiential stuff, not the debating and theorizing that comes with introducing political angles. The numerical and experiential is what excites and interests me, not promoting the political views I personally have. While I’m interested in the nuances of some issues, I have literally negative interest in debating those political issues with a wide audience, and I’m pretty sure much of my audience wouldn’t like it either. That type of soapboxing and wide debate doesn’t appeal to me as an individual.

If I were to choose to start writing about politics in that way, a lot of negative things would happen. For one, I’d immediately find myself in political debate with a significant portion of my audience. I’d alienate those who disagree with the ideas I’m proposing. I’d also alienate those who have little interest in political debate. All of that would occur because I chose to write about topics that I actually don’t want to even write about on a wide stage. I would enjoy the writing much less (transforming it from something that’s usually joyful into something that’s a negative chore), alienate a significant portion of my audience, and change the tenor of the whole site.

There are likely people out there who would love to delve into that middle area between politics and personal finance. It’s likely a space for a really successful website, and likely several, because there are a lot of different perspectives one could hold. I’d love to read some of them. It’s just not a website I have any interest in writing.

Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.

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