Financial planning

Question: I was in the hospital recently and got my bill. It was unbelievable. Then I got something from the insurance company saying I didn’t have to pay that much. But I still have a very high deductible and a big co-pay. I don’t understand how the hospital says I owe one thing and the insurance company another. Who is right?

Answer: There is very little right about the process you’ve just experienced.

Imagine a world in which all the grocery stores were full of the best that money could buy (kind of like we have here in real life). The only thing these stores don’t have is a price tag. There are no price tags indicating how much any of the items in the store will cost you.

Question: Someone talked me into consolidating a bunch of credit cards I had with high interest rates. Now I have no idea how I ever made it when paying on all those cards each month. They said I would be able to save the money, but I haven’t been able to. What do I do now?

Answer: Begin by telling yourself the truth.

Question: I know that I am financially sick. I am not sure how to start a budget. My credit score is a total mess. I cannot even figure out how I got here. How do I get well?

Answer: When you’re driving, it’s a good idea to keep your eyes looking forward, with occasional glances into the rearview mirror to see where you’ve come from.

Question: I have seen my own parents and some of my friends do some things financially and otherwise that just seem obviously dumb. Or at least shortsighted. The example I’m thinking of when they buy things with a credit card that will then charge them 18% for the privilege. But it could be any number of things. Why do you think people make these kinds foolish financial decisions?

Answer: Economists like to say people are rational.

Whenever I read that, I think, “Sure are…sometimes. But other times, they are fearful, other times resentful, other times prideful and once in a while, just plain dumb.”

Question: I have gotten into so much credit card debt that I don’t think I can ever save any money. How can I turn this around?

Answer: Actually, you are already saving money. You’re just doing it in reverse… and for someone else.