As Congress tries to hash out health care reform (and wrangle over a public insurance option), many have wondered about the place of long-term care. Most have said including it in reform is too expensive. However, new legislation may help mitigate some of the costs — and provide a savings vehicle for those who expect to need help with long-term care costs in the future. It is called the Community Living Assistance Services and Supports Act (CLASS Act — don’t you love how they name these things?). NPR reports on the main thrust of the act:

That legislation, which is part of the committee’s health bill, would let workers choose to have government deduct money from their paychecks — maybe $65 to $100 a month — and put it in a savings account. When they get old or disabled and need care, they could then use that money.

Anything that encourages automatic savings is generally a good idea. I would be interested to know whether the savings account would offer a high yield, and whether you could direct some of the money to be put into conservative investments. Of course, since it would be a long-term investment, I would favor index funds. I think that something similar to retirement accounts now — complete with tax advantages and the ability to direct some investments — would be in order. But it doesn’t look like that has really been thought out.

In any case, it is fairly obvious that health care reform on all fronts is needed. The private sector has largely dropped the ball, and offering a public option for health insurance (perhaps something similar to what our elected officials have access to) is a good first step. And you wouldn’t be forced to choose it if you could get a better deal elsewhere. A public option would introduce something akin to competition in a market where, quite frankly, there is very little.

Image source: NESRI via Flickr

Free Money Finance has been sharing information about jobs had in high school and college. I thought this was a really cool idea. After all, I wasn’t always a freelance writer. I did other jobs, too! And learned plenty from them. Here is a sampling of some of my former jobs:

• Cashier at a craft store (high school): Learned that it can be inconvenient to work on someone else’s schedule. But I also learned the value of doing the best you can at whatever job you are doing, and that others value your competence.
• Piano teacher (high school): Learned that it is much more pleasant to set your own schedule and be able to set your own rates. Of course, when you teach lessons, you still have to consistently provide the service you are being paid for. But I could decide my own hours, and choose to take fewer students.
• Cafeteria worker (college): Learned that work study is a great way to help you get through college. Also learned the value of a job with benefits. No, my part-time work study job at the cafeteria did not include health benefits. But it did include free food — anytime I wanted it. Talk about a benefit!
• Radio DJ and underwriting director (college): Learned that I enjoy media and communications. I also learned the value of getting paid for doing something you enjoy. Even making a little less is worth it if you enjoy your work.
• Resident adviser (college): Learned that a home business can be a great thing. I got paid for doing something based out of my dorm room. I could set my own schedule, and go about my business from my living quarters. Convenient and helpful.
• Cashier farm and ranch store (post-college): Learned that sometimes it really is who, and not what, you know. I don’t know about farm and ranch products. But I did know the owner of the business. And that meant I got a cashier job. Networking is valuable when you are looking for a job.
• Office coordinator and Classified sales for local newspaper (post-college): Learned that I would rather write for a newspaper than sell ads for one. This job set me on the path to freelancing by inspiring me to go back to school and get my M.A. in journalism.

It’s pretty ease to see how my other jobs taught me things that I use now. Indeed, my jobs taught me the value of having flexible hours, working for myself and a number of other skills. I still network, and I still try to work hard and do my best.

What did your previous jobs teach you?

Image source: Quadzilla99 via Wikimedia Commons

There are few things I enjoy more than listening to good music (although reading a good book qualifies). This is a simple, straightforward rendition of the Star Spangled Banner by the United States Marine Band. It’s in honor of the 4th of July. I hope you are enjoying the festivities today.

Happy 4th of July!

JibJab and ThePartyParty.com put together this cool rendition of the Star Spangled Banner. Enjoy!

Happy Friday!

I remember the days of my undergraduate career. Every year, tuition went up. I had a scholarship, so it didn’t impact me that much, but student fees generally rose along with tuition. And every year that my husband has been in grad school, we’ve watched tuition increases and student fee hikes. But this year, things are different. Yes, tuition is going up. But it’s not going up by quite so much. BloggingStocks reports on the new tuition hikes:

Tuition is up only 4.3% for the coming school year, the lowest rate of growth in 37 years, according to a survey of 350 private schools by the National Association of Independent Colleges and Universities. This is down substantially from the 5.9% increase for the 2008-2009 school year. Of course, this is for tuition only and does not include room and board inflation.

To further help some folks, financial aid is seeing an increase of 9.2%. So that means that, for some, it may actually be manageable to keep up with tuition hikes this year. But, as the BloggingStocks article points out, room and board have likely gone up as well. This might offset some of slowed inflation in tuition and fees.

Money troubles and higher education

It is getting more and more difficult for the schools themselves, as well as the students. This is because new money is down as benefactors reduce their contributions. (After all, the number of billionaires is decreasing, and those who are still billionaires have, well, billions less.) Not only that, but many universities have trusts and other investments that are significantly reduced in value, thanks to a bear stock market. While these investments will eventually rebound, for now it means less money to go around — and in some cases staff cuts and project terminations. The project my husband is working on here at USU got cut. He is fortunate in that a graduate in the department moved on and vacated a spot on a different project. He was successfully shifted, and retained his position. But not everyone is so lucky.

Image source: Widosu via Wikimedia Commons

Numerous stories are popping up around the personal finance blogosphere with regard to the fact that Chase is raising the minimum payment on its credit cards. Last month, I wrote a post about things are about to get ugly for consumers in terms of their credit card accounts. So it was no surprise when that post (although a month old) saw this recent comment from a reader, Lisa:

Yesterday (6-25-2009) I got a notice saying my “minimum” monthly payment was going from 2% to 5%. That means my payment of $345.00 will start to be $810.00 in August. I will not be able to afford that. Mind you, I always pay my bills, don’t get late payment charges and the last time I checked, my credit score was like 797. Yes! I’m having financial troubles and am just barely holding on. This will send me over the edge - especially if my other credit cards follow this one. … HELP!

This is probably a common refrain across the nation right now. And, sadly, this new rule is aimed exactly at folks like Lisa. Chase will keep your minimum payment at 2%, if you agree to allow the company to raise your interest rate. The most common recipients of this change to credit card terms are those with low introductory rates of between 2.9% and 5.9%. You can see where this is going. The higher interest rate means Chase gets more money, and allowing you to keep the lower minimum means that you make payments for longer — meaning Chase gets more money. The way I see it (and every situation is different), there are three options here:

Option #1: Suck it up and make the new minimum payment

If you don’t agree to the higher interest rate (and keeping the current minimum payment), you will have to make the new payment. Since you have about a month, now is the time to do some serious surgery on your personal finances. Look over your budget and see where you can make cuts. This may include cuts to entertainment, cell phones, eating out and other negotiable expenses. (Note: Your housing payment, especially if you have a mortgage, is not negotiable. Always make sure this is paid.) Figure out which expenses you can cut and get it so you can make the new minimum payment. It’s not pleasant, but in the long run, you will save money in interest and pay off your debt faster.

Unfortunately, many people do not have the option to cut back so dramatically. The current economic conditions mean that some folks, due to cutbacks or layoffs at work, do not have the ability absorb an increase of the magnitude proposed. In such cases, you might go with:

Option #2: New loan

In some cases, it might be wise to get a new loan to cover the amount of what you owe. Pay off the credit card, and move on. Of course, you still have a loan. You might try switching to a different credit card with an introductory rate of between 0% and 3.99%. You could also consider getting a debt consolidation loan from somewhere. If you have reasonably good credit, you might be able to get a personal loan with an interest rate of between 7% and 12% from your bank or credit union. (While this is higher than your intro rate, it is likely to be a lower rate than what the credit card will offer you in exchange for keeping the minimum low.)

Another possibility is to use P2P lending, such as Prosper or Lending Club to help you lower your payments. In any case, though, I would think twice (or thrice) about using a home equity loan to secure your credit card payment. Do that last.

Option #3: Debt settlement or bankruptcy

If nothing seems to be working at all, you can reach for the final tool of desperation in these cases: Debt settlement or bankruptcy. You can usually reach settlement for unsecured debt, allowing you to pay less than you currently owe on your credit card. As an extreme last resort, bankruptcy can help lower your payments to something affordable (even though in recent years bankruptcy laws rarely allow you to walk away). In both cases, your credit will be shot, so it is not a decision to be taken lightly.

What will you do if your credit card minimum is raised?

image source: daylife

Disclaimer: I am not a financial professional. Any information you get from this site is not intended as advice. It is likely to be incomplete, and it may not apply to your individual circumstance. Do your own research, consider your situation and/or consult a professional before making money decisions.

Keith over at Spend on Life sent me an email late last week to find out whether or not I had heard of a new service being offered by the site. It’s called Twinancial.

Twinancial pulls finance tweets off of Twitter, aggregating them in a way that makes it easy for you to read what is being said about a number of financial topics. It looks like a very interest service, although I haven’t delved too deeply into it. Twinancial offers RSS so that you can have the tweets delivered to your reader. Unfortunately, even though Twinancial uses Twitter, it does not offer a stream of tweets from those that Keith and the folks at Spend on Life are not subscribed to.

All in all, though, Twinancial is interesting for those who want to see what finance folks are tweeting about. Have you checked out this service? What do you think about Twinancial?

I once found a gig on Craigslist. I’ve used Craigslist to get rid of things. And I know that there are people who swear by it. So I enjoyed this song from Weird Al Yankovic (remember him?), addressing Craigslist. Enjoy.

Happy Friday!

I really liked this world resources map post on the Mint.com blog. I’ve noticed that Mint.com offers a variety of interesting visuals on its blog. I know that there are plenty of people who manage their money through Mint, and it does appear to be a very valuable resource.

At any rate, here is the map. What do you notice about where the resources are?

Clearly, there is a reason that we are in the financial position we are in. We are primarily focused on consuming. While exporting industry and raw materials may not be something feasible going forward, we do have the innovative potential to export ideas, technology and highly educated workers to other countries. It would be interesting to see what a map of knowledge resources looks like.

And it would be even more interesting to see where the U.S. placed on that map.

One of the biggest changes to financial system regulation presented in President Barack Obama’s regulatory reform proposal calls for the creation of an agency devoted to protecting consumers. This new agency could demand any number of reforms from banks and other financial institutions. It could require greater transparency, simpler financial products and even set caps on interest rates that could be charged for certain kinds of loans.

The new standards could also be applied to mortgage lenders, forcing them to provide the option of mortgages with simple terms, and requiring mortgage lenders to offer the best available mortgages. It might even mean that mortgage lenders have to (gasp!) make sure that borrowers can actually afford the home loans that they are getting.

In addition to protecting the run-of-the-mill consumer, Obama also wants to protect investors. His regulatory reform would require that hedge funds engage in greater disclosure and would institute the regulation of derivatives and credit default swaps.

Regulatory reform: What is needed? Or does it go too far?

While some are applauding the consumer protection measures, others are concerned that they go too far. What happens when the government sticks its fingers too much into the regulatory pie? As expected, reactions to the proposed consumer protections pretty much fall along the following lines:

1. Consumer advocates call them a good balance.
2. The banking industry insists they go too far and will ruin business.

I’m inclined to call them a good balance. Consumer protection is badly needed right now. While over-regulation is a stifling influence, prudent regulation can be something that eventually helps everyone. No, the economy won’t boom like it did during the era of de-regulation. But what did a massively growing (and artificially stimulated) economy get us anyway? A massive recession to balance the growth, that’s what.

What do you think of the new consumer protection agency proposed by President Obama?

Image source: Wikimedia Commons