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Author: Dede108 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308232  
Subject: Credit card debt Date: 9/4/2012 1:23 PM
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I have recently found out that we owe a lot in credit card debt.Does it make sense to borrow from my IRA or 401 K to pay off the credit cards?
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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305857 of 308232
Subject: Re: Credit card debt Date: 9/4/2012 2:09 PM
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I have recently found out that we owe a lot in credit card debt.Does it make sense to borrow from my IRA or 401 K to pay off the credit cards?

Rarely does it pay off, and frequently it makes the situation worse. Those who "pay off" credit cards with other debt frequently run up their cards again.

You can't borrow against an IRA. A 401K loan does have risks. If for any reason you can't make the payments, it becomes a distribution which is taxable and may have federal and state penalties.

Most 401K plans now allow paying off the loan on the agreed schedule after you leave your employer, but not all. It is possible that the balance might have to be paid immediately on separation from your employer.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305858 of 308232
Subject: Re: Credit card debt Date: 9/4/2012 2:22 PM
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Hi, welcome to the board.

There are people who have withdrawn from their accounts to pay off the bills, and a lot of them lived to regret it. There are also people who borrowed again their home equity to pay the bills, and a lot of them were sorry, too.

I don't know for sure, but I don't think you can borrow from your IRA. You can withdraw what you put into your Roth IRA, but you can't touch the interest.

The problem with the fast payoff from your retirement is that it's all too easy to run up the cards again, leaving you even deeper in debt than you were originally. And now you have lost your retirement money as well.

Do you know how the debt got to this point? Medical debt, just plain living above your means? Furnishing a house?

One of the problems with credit card debt is that if people don't understand exactly how they got into debt, and if they don't work to change that behavior, they can pile up debt again.

The best, and simplest way to work your way out of debt is to increase your income, and/or decrease your outgo.

The members of the board can offer a lot of ideas about how to decrease your outgo if you'd like some advice. All you have to do is explain your problem areas.

Nancy

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Author: MetroChick Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305859 of 308232
Subject: Re: Credit card debt Date: 9/4/2012 2:28 PM
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Does it make sense to borrow from my IRA or 401 K to pay off the credit cards?

No - that's a retirement account. Don't touch those until retirement unless you've exhausted all other options and are about to be homeless.

CC debt ususally means either there was an emergency before you could save enough of an e-fund (such as medical debt) or there's a spending problem. If there's a spending problem, that needs to be addressed while paying off the cc debt, otherwise who ever ran up the debt is likely to do so again. If there was an emergency, than thank goodness it's fairly easy to get credit in this day and age and look at options for paying it down faster (such as seeing if rates can be negotiated, or if more work hours can be gained).

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305864 of 308232
Subject: Re: Credit card debt Date: 9/4/2012 8:11 PM
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How did you just find out you had credit card debt? Was this debt you incurred but didn't realize you had? Or did your spouse (or someone else who has access to your cards) incur the debt and you didn't know about it? If it is the latter, what steps have been taken so that this doesn't happen again?

I'm not totally against borrowing from a 401(k) and have done it before. I did used to have a lot of credit card debt and borrowing from a 401(k) isn't without risk (such as if you have to leave that employer and the loan comes due). If your plan does allow a 401(k) to continue to be paid off after leaving the employer then that risk doesn't exist. The bigger risk is that you take the loan to pay off the credit card debt (actually just moving it to your 401k) and then you (or someone else who has access to the cards) charges up to the cards again and you end up having both a credit card debt and a 401(k) loan. Only you can know if that is a risk you need to be concerned about.

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Author: kahunacfa Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305865 of 308232
Subject: Re: Credit card debt Date: 9/4/2012 8:53 PM
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I have recently found out that we owe a lot in credit card debt.Does it make sense to borrow from my IRA or 401 K to pay off the credit cards? - Dede108 | Date: 9/4/2012 1:23:47 PM | Number: 305864

No, absolutely NOT.

The credit card debt is unsecured, signature debt. The IRA is a protected long-term Trust.

Kahuna, CFA
Investment Professional
1974 - Present

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305866 of 308232
Subject: Re: Credit card debt Date: 9/4/2012 11:58 PM
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I have recently found out that we owe a lot in credit card debt.

Well, something's not exactly right with this statement....

If you 'just found out' that 'we' owe a lot of credit card debt - was it your spending or your significant other's spending? Is the debt on your cards, your significant other's cards, or joint cards?

If it's on your cards, or joint cards, or was partly your spending, how did you 'just find out'?

Does it make sense to borrow from my IRA or 401 K to pay off the credit cards?

Well, you are not allowed to borrow from an IRA, so that's not even an option. Borrowing from a 401(k) isn't 'paying off' the debt - it's just moving it from one debt to another debt, and the 401(k) debt has a lot of potential tax issues that, if they occur, will likely cost you a lot more than the interest in on the credit cards would cost. So, it's not a good idea at all.

YOU CAN'T BORROW YOUR WAY OUT OF DEBT!

If you want to resolve your debt problem, you first need to start living within your means so that you don't keep adding to the debt. Then take the extra surplus income you have created by living below your means, and apply it to the debt.

AJ

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305870 of 308232
Subject: Re: Credit card debt Date: 9/5/2012 9:04 AM
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Do you know how the debt got to this point? Medical debt, just plain living above your means? Furnishing a house?

I humbly submit that, if you cannot afford it, then medical debt and furnishing a house are merely subsets underneath the umbrella of just plain living above your means.

xtn

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305872 of 308232
Subject: Re: Credit card debt Date: 9/5/2012 10:18 AM
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I humbly submit that, if you cannot afford it, then medical debt and furnishing a house are merely subsets underneath the umbrella of just plain living above your means.

So if you are desperately ill you should just die because you can't afford the medical expense? An appendectomy is considered "Living Above Your Means"? Not in my book.

There are lots of reasons why people get into debt. We don't know if this debt is a one-time shot that is unlikely to happen again, or if it's the result of years of overspending.

Nancy

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Author: MetroChick Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305873 of 308232
Subject: Re: Credit card debt Date: 9/5/2012 10:46 AM
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I humbly submit that, if you cannot afford it, then medical debt and furnishing a house are merely subsets underneath the umbrella of just plain living above your means.</I.

If it's necessary medical care that you don't currently have savings for, if you don't pay it with debt you might not be doing any Living going forward.

Debt is temporary, death is forever.


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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305874 of 308232
Subject: Re: Credit card debt Date: 9/5/2012 10:55 AM
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>> I humbly submit that, if you cannot afford it, then medical debt and furnishing a house are merely subsets underneath the umbrella of just plain living above your means. <<

Furnishing a house I agree with. But medical debt? If someone is underinsured or uninsured and they need very expensive life-saving intervention, are they supposed to refuse it and die so they can LBYM?

#29

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305875 of 308232
Subject: Re: Credit card debt Date: 9/5/2012 10:57 AM
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I humbly submit that, if you cannot afford it, then medical debt and furnishing a house are merely subsets underneath the umbrella of just plain living above your means.
I'm sure my Mom's best friend carefully considered this before deciding to get cancer. How profligate of her, living beyond her means with all that chemotherapy and all...

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305877 of 308232
Subject: Re: Credit card debt Date: 9/5/2012 3:57 PM
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So if you are desperately ill you should just die because you can't afford the medical expense?

That's the biggest twist of meaning ever laid upon me. By all means, if the only other choice is death, then live above your means. I just don't think the definition of living below your means has a disclaimer saying, "unless you're going to die," so emergency medical debt is still living above your means.

xtn

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305878 of 308232
Subject: Re: Credit card debt Date: 9/5/2012 4:00 PM
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Furnishing a house I agree with. But medical debt? If someone is underinsured or uninsured and they need very expensive life-saving intervention, are they supposed to refuse it and die so they can LBYM?


No of course not. Keep yourself alive and healthy if possible. But that doesn't mean it isn't living above your means. I mean... if it IS above your means. Whether or not an expense is necessary does not exclude it from the calculations.

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305879 of 308232
Subject: Re: Credit card debt Date: 9/5/2012 4:02 PM
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I'm sure my Mom's best friend carefully considered this before deciding to get cancer. How profligate of her, living beyond her means with all that chemotherapy and all...

Sheesh people. You're all inferring some meaning that I did not imply. If the cancer treatment cost more than she could afford, then she was living beyond her means. I didn't say it was a bad choice to do so.

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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305880 of 308232
Subject: Re: Credit card debt Date: 9/5/2012 6:14 PM
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>> No of course not. Keep yourself alive and healthy if possible. But that doesn't mean it isn't living above your means. I mean... if it IS above your means. Whether or not an expense is necessary does not exclude it from the calculations. <<

Technically true, but the usual, obvious tone of discussion here is that "living above your means" is automatically irresponsible and that any financial struggles you have for doing so are self-inflicted and your own fault. I just don't think necessary medical expenses fall into that category in the general case. Buying a $50,000 car on a $20,000 income, yes. Cancer surgery, no.

#29

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305884 of 308232
Subject: Re: Credit card debt Date: 9/5/2012 9:11 PM
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You're all inferring some meaning that I did not imply. If the cancer treatment cost more than she could afford, then she was living beyond her means. I didn't say it was a bad choice to do so.

I think we understand what you wrote. But the problem is that what you wrote was not what you meant.

Here on this board an a couple of others we generally frown upon people who live above their means. We have had thousands of posts regarding the trouble they are in, what they are doing to themselves and their families, and how dangerous it is to live above your means. So when you wrote that people who have medical debt are just living above their means, it certainly read as though you had nothing but contempt for people who spent money for something they couldn't afford, even if it was something they would die without. So I don't think that we misread you. You wrote something that wasn't clear.

Maybe, in the future, you could explain yourself a bit better?

Thanks.

Nancy

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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305886 of 308232
Subject: Re: Credit card debt Date: 9/6/2012 1:18 AM
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Windowseat,

You wrote to xtn, I think we understand what you wrote. But the problem is that what you wrote was not what you meant.

Funny. I think I understood exactly what xtn meant when I first read it. It didn't really seem all that ambiguous to me. And what he wrote later did not seem to contradict his first statement.

His saying that someone with an illness is living beyond their means when they have to borrow to pay for necessary medical care neither bothers nor offends me. It just seems like a logical extrapolation from the definition of living beyond your means. I would name that Truth.

Of course I think we all understand that illness and injury can be hard, if not impossible to plan for. And for some reason they tend to happen at the worst possible time. These things happen. But as my favorite author used to say, "You do what you must and pay the price." The same holds true here. You don't have the money to pay for that life-saving operation? Too bad. You borrow what you need and deal with the consequences.

Even so, I don't see why xtn should start qualifying his definition of "living beyond your means". That just smacks of pointless political correctness.

- Joel

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Author: MetroChick Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305889 of 308232
Subject: Re: Credit card debt Date: 9/6/2012 11:22 AM
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so emergency medical debt is still living above your means

Basically that would mean anyone without millions to cover the possibly countess emergencies one could face is "living above their means" - since anyone can encounter a medical event or multiple catastrophic life events at the same time that their savings might not be high enough to handle, even if they were living well below their means up until the point of the emergency and catastrophic events.

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305890 of 308232
Subject: Re: Credit card debt Date: 9/6/2012 11:26 AM
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Technically true, but the usual, obvious tone of discussion here is that "living above your means" is automatically irresponsible and that any financial struggles you have for doing so are self-inflicted and your own fault.

I agree, but life-saving medical expenses aren't usually lumped into that perspective, so the inference that I intended to lump them into it was a flawed one. The logical inference to be made is that I was speaking technically.

xtn

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305891 of 308232
Subject: Re: Credit card debt Date: 9/6/2012 11:31 AM
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Here on this board an a couple of others we generally frown upon people who live above their means. We have had thousands of posts regarding the trouble they are in, what they are doing to themselves and their families, and how dangerous it is to live above your means. So when you wrote that people who have medical debt are just living above their means, it certainly read as though you had nothing but contempt for people who spent money for something they couldn't afford, even if it was something they would die without. So I don't think that we misread you. You wrote something that wasn't clear.

Among the thousands of post establishing that perspective of LAYM, don't we usually exclude necessary medical expenses from it? Why is the assumption here that I meant to include it in such a light? Isn't the more logical assumption that I intended only to be technically accurate?

Either way, sorry for the disruption.

xtn

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305892 of 308232
Subject: Re: Credit card debt Date: 9/6/2012 11:37 AM
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so emergency medical debt is still living above your means

Basically that would mean anyone without millions to cover the possibly countess emergencies one could face is "living above their means" - since anyone can encounter a medical event or multiple catastrophic life events at the same time that their savings might not be high enough to handle, even if they were living well below their means up until the point of the emergency and catastrophic events.

Basically that would mean anyone without millions to cover the possibility that they might buy a 747 for personal use is "living above their means" - since anyone can encounter buying a 747 for personal use or several smaller business jets at the same time that their savings might not be high enough to handle, even if they were living well below their means up until the point of the emergency and catastrophic events.

Nope. Doesn't work. It only becomes LAYM when you actually buy the jet(s)... or incur the medical expense(s).

xtn

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Author: Rael137 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305894 of 308232
Subject: Re: Credit card debt Date: 9/6/2012 12:21 PM
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Among the thousands of post establishing that perspective of LAYM, don't we usually exclude necessary medical expenses from it?Why is the assumption here that I meant to include it in such a light?

I think I understood what you first posted - and agreed. The issue has just gotten confused with the emotion of "do you mean essential medical treatment should be declined?!!!" I'm pretty sure that is not at all what you meant.

(1)Put it this way, for those of us who are fortunate enough to have (decent) health insurance, we can generally predict how much we need to save to pay in a given year: premiums, co-pays, co-insurance, prescriptions.

(2)You can add on the extra things you may know about: special surgery, new baby, etc. Above that, you could predict what your out-of-pocket max may be in a year and include it in your emergency fund. So far, we are handling normal emergencies/unexpected events and still LBYM.

(3)The next level is an unexpected emergency with harder to predict costs: burst appendix w/complications, car accident, cancer. You may have covered out of pocket max in your emergency fund but this may be way more including loss of income. Are you ready for that?

I would say that if someone is not prepared for the 2nd level then they are LAYM but the 3rd level (catastrophic emergencies) are not a part of the predictable plan.

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Author: MetroChick Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305895 of 308232
Subject: Re: Credit card debt Date: 9/6/2012 7:29 PM
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Basically that would mean anyone without millions to cover the possibility that they might buy a 747 for personal use is "living above their means" - since anyone can encounter buying a 747 for personal use or several smaller business jets at the same time that their savings might not be high enough to handle, even if they were living well below their means up until the point of the emergency and catastrophic events.

Nope. Doesn't work. It only becomes LAYM when you actually buy the jet(s)... or incur the medical expense(s).


Except when you go to the 747 jet store, you know how much the product costs before deciding to buy it - with medical care, not so much.

By your definition than Living Below Your Means or Above Your Means is never something you're doing in the present - it's only by analzying the past that you can determine if you covered all your expenses at any given point in time. Sorry but that's not the definition most people use.

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305897 of 308232
Subject: Re: Credit card debt Date: 9/7/2012 12:22 PM
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Except when you go to the 747 jet store, you know how much the product costs before deciding to buy it - with medical care, not so much.

By your definition than Living Below Your Means or Above Your Means is never something you're doing in the present - it's only by analzying the past that you can determine if you covered all your expenses at any given point in time. Sorry but that's not the definition most people use.


I see what you mean... I think. Doesn't matter if we've run ourselves into the ground for a decade, as long as we don't run out of paycheck THIS week we're allowed to call ourselves LBYM. Right? Is that what you're saying?

Well I agree inasmuch as we can say we're LBYM now, this week. But we can also make a statement about the past. We can say we have not been LBYM for the previous decade. Every time I say that I LBYM, must I include a timeline qualifier? I guess if the conversation gets deep enough, sure. But probably not if I'm just briefly describing my philosophy. I don't have to say, "Well LAST week I bought a new car, which was way more than my paycheck for that week, but overall over time I spend less than I earn in total." Or at least I don't want to be bothered saying it.

Some people who LATM now and for the next several years may, by the end of their life, be debt free and have some savings. So can we go ahead and call them LBYM now? In the future we can say that overall over time LBYM. The current LATM condition is only the past of that future condition. I don't think I can conclude this line of thought because my brain is getting twisted up with semantic paradoxes.

So I'll instead conclude thusly: I don't think the knowledge of pricing, or lack thereof, at the time of the expense is a factor in looking at your successive balance sheets and determining if you've lived above or below your means during some period of time. You either have or you haven't, and whether the price of an expense was known or unknown when you incurred it has no bearing.

Also this: If you've received life saving medical treatment at a cost that is way more than you can ever pay back, then you are LITERALLY "living" above your means.

xtn

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Author: reallyalldone Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305898 of 308232
Subject: Re: Credit card debt Date: 9/7/2012 12:34 PM
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So I'll instead conclude thusly: I don't think the knowledge of pricing, or lack thereof, at the time of the expense is a factor in looking at your successive balance sheets and determining if you've lived above or below your means during some period of time. You either have or you haven't, and whether the price of an expense was known or unknown when you incurred it has no bearing.

The idea that medical expenses, even extraordinary ones, can be unexpected is true, IMHO. That they can't be planned for, isn't. It's the same for purchasing almost any insurance. It's planning for things that may or may not happen but which you wish to plan for in any case.

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Author: MetroChick Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305899 of 308232
Subject: Re: Credit card debt Date: 9/7/2012 1:51 PM
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The idea that medical expenses, even extraordinary ones, can be unexpected is true, IMHO. That they can't be planned for, isn't. It's the same for purchasing almost any insurance. It's planning for things that may or may not happen but which you wish to plan for in any case.

I'm probably going to need major surgery sometime next year - can you tell me what my medical expenses are going to be, as I don't really know?

Right now with my employer-based health insurance the out-of-pocket max is $5,000. So I've been specifically saving for this - luckily I have other savings too. But my company's policy is up for renewel every April, so by April 2013 they might be on a different plan - maybe the out-of-pocket max will decline to $3,000 - maybe it will increase to $10,000. No way for me to know. And if I end up needing surgery late this year, I could get hit with that yearly $5K out-of-pocket max at the end of this year, and possibly at the beginning of next year when I'm still recouperating and going to Physical Therapy that's considered regular part of treatment.

Also I just found out that starting in 2013, the insurance is only covering 30 days worth of opiate prescription painkillers per year. From what I've read, patients having the kind of surgery I need often need painkillers for more than 4 weeks post-op - so I'll get to pay for any past 30-days out-of-pocket - and that won't get applied towards that $5K out-of-pocket max, since presciption drugs and medical care are covered as separate policies. And here's hoping I don't need major dental work like a root canal the rest of the year that could require painkillers.

I think we fool ourselves by calling it "insurance" when medical insurance is really a discount plan - and it's hard determining just how much you'll use even if the need for major surgery is known in advance.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305900 of 308232
Subject: Re: Credit card debt Date: 9/7/2012 1:55 PM
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I agree that one should plan for emergencies whether that be medical or anything else. So, yes, planning for medical expenses that are unanticipated is a part of LBYM. That said, I don't think you can say that someone is living above their means because they were unable to save up for and plan for truly extraordinary expenses.

Imagine someone making $50000 a year who has medical insurance through work and is prudent and has a $25000 emergency fund. In fact, let's make it a $50000 emergency fund and that person is saving for retirement and is debt free. By any reasonable standards, the person is LBYM.

Imagine the person becomes seriously ill with a life threatening illness and the insurer goes broke and the person's employer goes under and the person's medical bills of $500,000 which were already incurred don't get paid.

In that situation I don't think it is really relevant or correct to say that the person was living above his/her means all along because that person can't pay the $500,000 medical bill. In that situation the person took reasonable means to prepare for unexpected expenses, had savings appropriate to income, but just wasn't able to save $500,000 for that eventuality.

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305901 of 308232
Subject: Re: Credit card debt Date: 9/7/2012 2:42 PM
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In that situation I don't think it is really relevant or correct to say that the person was living above his/her means all along because that person can't pay the $500,000 medical bill. In that situation the person took reasonable means to prepare for unexpected expenses, had savings appropriate to income, but just wasn't able to save $500,000 for that eventuality

I totally agree with that. But still maintain that - technically - he is living above his means once the bill becomes due by him. It may not be really relevant, but it is correct.

xtn

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305902 of 308232
Subject: Re: Credit card debt Date: 9/7/2012 3:09 PM
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xtn:

<<<In that situation I don't think it is really relevant or correct to say that the person was living above his/her means all along because that person can't pay the $500,000 medical bill. In that situation the person took reasonable means to prepare for unexpected expenses, had savings appropriate to income, but just wasn't able to save $500,000 for that eventuality.>>>

"I totally agree with that. But still maintain that - technically - he is living above his means once the bill becomes due by him. It may not be really relevant, but it is correct."

Only to curmudgingly literal inerrantist. Do you understand the concept of idiomatic expressions?

If I were to say my hypothetical girfriend is hot, would get a thermometer to take her temperature and see if it as above 98.6 F?

If I were to described one of my freinds as cool, would you adjust the thermostat to a warmer setting?

I I were to say that somebody dropped a dime on somebody else, because they called the police, would argue that they did not drop a dime on them because no dime fell on such person (the statement was not literally true even phones were still common and only cost a dime)?

If I were to call you aweful, would you consider that a compliment because of the originally meaning of the word aweful?

I believe that all languages have idiomatic expressions, and I suspect that English (especially American English) has more than most. What everyone else has been hinting at, and which you sort of seem to acknowledge before climbing back into you literalist claim, is that the phrase "living above your means" is an idiomatic expression to everyone except you.

Regards, JAFO

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305903 of 308232
Subject: Re: Credit card debt Date: 9/7/2012 4:04 PM
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Thanks JAFO, that was a good post and I do understand.

I just don't think the fact that LAYM can and often is used as an idiomatic expression precludes its literal usage. If you told me your hypothetical girlfriend is hot, I would seek contextual clues to determine your meaning. If the guys were standing around talking about girls, it would obviously have one meaning. If you were explaining why you and she were about to leave the beach, then it would be pretty safe to assume the other meaning.

I feel that the context for my original statement - which is a situational usage of LAYM that excludes such factors as expensive, unexpected medical expenses - ought to make it obvious that I meant it only technically.

It isn't an idiomatic expression to everyone except me. It's just that I seem to be the only one willing to accept that it can be used either way. Well, a couple of posters indicated they understood what I meant, so maybe there are more of us.

It isn't a "literalist claim." It's just a statement without emotion or judgement. If some of you want to infer the negative connotation because it is commonly associated, and cannot accept that it is possible for me to make a statement about LAYM that doesn't include it... well I don't know what else I can do besides offer my explanation and apologize for unintentionally starting a ruckus.

xtn

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305904 of 308232
Subject: Re: Credit card debt Date: 9/7/2012 6:13 PM
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xtn:

"Thanks JAFO, that was a good post and I do understand."

"I just don't think the fact that LAYM can and often is used as an idiomatic expression precludes its literal usage.

Perhaps not, but it can be very difficult to communicate effectively if the the same words mean different things to different people. As a result, while there may be some overlap, eventually one usage usually wins out of the the other (even if the otehr usage is "technically" correct. Think aweful. Think gay. And there are probably plenty more examples but I am not inclined to look.

"If you told me your hypothetical girlfriend is hot, I would seek contextual clues to determine your meaning. If the guys were standing around talking about girls, it would obviously have one meaning. If you were explaining why you and she were about to leave the beach, then it would be pretty safe to assume the other meaning."

And the context is this board, where LAYM is most often used idiomatically.

"I feel that the context for my original statement - which is a situational usage of LAYM that excludes such factors as expensive, unexpected medical expenses - ought to make it obvious that I meant it only technically."

That did not seem to be what most be understood, or this thread would have never got this long.

"It isn't an idiomatic expression to everyone except me. It's just that I seem to be the only one willing to accept that it can be used either way."

And the difference is? And that makes it more difficult for the rest of the board to understand what you meant.

"Well, a couple of posters indicated they understood what I meant, so maybe there are more of us."

Sort of and they did not seem to be ready to agree to use it the same way (as best as Ic old interpret).

"It isn't a "literalist claim." "

It certainly was not idiomatic in your usage, and if not idiomatic then how is it not literalist?

"It's just a statement without emotion or judgement. If some of you want to infer the negative connotation because it is commonly associated, and cannot accept that it is possible for me to make a statement about LAYM that doesn't include it... well I don't know what else I can do besides offer my explanation and apologize for unintentionally starting a ruckus."

You can certianly offer an explanation, but if you must offer an explanation to clarify your meaning, then I suggest your usage is out of synch (no pun intended), with the usage by the majoirty of the board. AFWIW, I do not think that you owe any apopolgy.

Regards, JAFO
[[[and just do not get angry with me if someday I describe you as a gay fellow (;>) ]]]

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305929 of 308232
Subject: Re: Credit card debt Date: 9/10/2012 3:46 PM
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and just do not get angry with me if someday I describe you as a gay fellow (;>)

Thanks JAFO. If you ever do the above, I will attempt to use context and logic to infer your intended meaning instead of just assuming the most common one.

xtn

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Author: DrBooa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305932 of 308232
Subject: Re: Credit card debt Date: 9/14/2012 2:27 AM
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I humbly submit that, if you cannot afford it, then medical debt and furnishing a house are merely subsets underneath the umbrella of just plain living above your means.

Um, xtn? I love you and stuff, and I read the thread and you apologized, but...

Ouch. It really hurt to read this. My husband was going through chemo recently, and is having surgery in two weeks. We got a bill the other day that started $75,000 (and thank goodness ended up with "And you owe $40"). I read what you wrote and my initial reaction was, well, I didn't post or read here for about a week and a half because it just hurt too much.

I love my husband and I think he deserves to live. I know you're not saying the opposite, but it sure feels like you think he's some kind of luxury pet I can't afford, like he's some exotic cat breed I got because he matches my handbag. I don't really have the words to express how much this hurt, and I understand you didn't mean it, and that you apologized for any hurt you caused.

The thing is, you apologized but then you said you didn't think you needed to, that you were just being literal, and people should know that interpretation of things. When you explain why the other person is wrong to feel hurt, you basically invalidate your apology. It's no longer, "I'm sorry I hurt your feelings," it's "I'm sorry you're an idiot who misinterprets other people words and then gets hurt. Boy, you sure are dumb."

Also? That is Rihanna in Chris Brown's tattoo. Don't be Chris Brown, xtn. I know you honestly mean no harm, because I've known you through this forum a long time, but honestly? Your explanation may be sincere but it's not helping you right now. Can you accept that you can hurt people even if you think it's illogical for them to feel hurt? Do you understand that you yourself are illogically clinging to how you think things should be, and how people work, despite mountains of evidence to the contrary?


--Booa

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Author: DrBooa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305933 of 308232
Subject: Re: Credit card debt Date: 9/14/2012 3:55 AM
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Argh. So, you and xtn are in agreement, so you're the only two valid data points? Everyone else are outliers?

I guess if you only have two data points, you're always going to get a perfect straight line curve fit through them. I'd call it reasoning ahead of the data, myself.


--Booa

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305934 of 308232
Subject: Re: Credit card debt Date: 9/14/2012 8:20 AM
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Booa,

How is your husband doing?

(My husband is receiving radiation therapy. I haven't seen the bills yet.)

Debra

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305935 of 308232
Subject: Re: Credit card debt Date: 9/14/2012 10:03 AM
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Dear Booa,

I do understand, but with difficulty. I've a very logical, literal person, and often have trouble realizing the emotional effect words can have until my foot is already in my mouth. I'm terribly, terribly sorry for any negative thoughts or feelings I have caused.

xtn

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305937 of 308232
Subject: Re: Credit card debt Date: 9/14/2012 12:51 PM
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I've a very logical, literal person, and often have trouble realizing the emotional effect words can have until my foot is already in my mouth.

Don't you mean fingers, not mouth.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305939 of 308232
Subject: Re: Credit card debt Date: 9/14/2012 5:20 PM
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I do understand, but with difficulty. I've a very logical, literal person, and often have trouble realizing the emotional effect words can have until my foot is already in my mouth.

I can explain what set everyone off. In the post you responded to I mentioned several different ways people could get into debt. When you responded, you put medical care in the exact same category as furnishing a house.

Most of us don't put them in the same category, because furnishing a house is something that can be delayed until you have the money for it, so going into debt for it is unnecessary debt. Medical costs, particularly the crucial kind that can't be delayed, might be termed a necessary debt, and most of us consider the two as being very different. We were upset at what was perceived as callous disregard for something that can be a life-or-death matter.

I understand that you were thinking of "if you don't have the money you are living above your means," in what might be termed an accounting category. But it still hurts to have a procedure that might save a life lumped in with sofas and television sets.

Nancy

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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305940 of 308232
Subject: Re: Credit card debt Date: 9/14/2012 6:12 PM
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DrBooa,

You wrote, Argh. So, you and xtn are in agreement, so you're the only two valid data points? Everyone else are outliers?

I know you're going through a tough time and I think you're a wonderful woman, but...

I just don't see how voting or statistics have anything to do with xtn's statements.

Also, I guess if you only have two data points, you're always going to get a perfect straight line curve fit through them. I'd call it reasoning ahead of the data, myself.

Are you suggesting I should mold my definitions and opinions around data samples? Isn't that a snobbish way of saying, we should care what people think? About Popular Opinion? A.K.A. Political Correctness?

xtn was just extrapolating from his definition of LBYM. Apparently my definition and his are similar. And I don't think my definitions really need to be molded around other people's opinions. It's quite possible for me to be right and (almost) everyone else to be wrong. It may or may not be true in this case; but it's possible.

Now if someone wants to make a rational argument for why LBYM shouldn't be defined that way, I'll listen. If I find the reasoning sound, I might change my definition. If I find it faulty, I won't. If I find it irrational or absurd, I might even rebut - even if it's not popular.

I'm sorry Booa, but I've still not heard a good argument for excluding life-saving medical care from the definition of LBYM. And I'm certainly not going to change my mind just because I was brow-beaten in a public forum for having an unpopular opinion.

With that out of the way, I would also say you should do what you must to save your husband's life. I certainly wouldn't fault you for it. I would even wish you both the best.

Finally, I would argue there are other valid reasons to live above your means. For instance, I would consider borrowing money to attend college living above your mean. And I wouldn't fault someone for doing it. (OK, I might fault them for borrow too much on a degree that won't repay the loan.) I would also say paying for a mortgage might be living above your means - at least if you don't have assets on-hand to pay it off. Of course in that case, you could rationalize that you're saving on rent. But either of these cases I think you are taking on a risk that can turn into a slippery slope if your not careful - and they're still living above your means. (I'm in the process of buying a house that costs too much. I can "afford it" only because of my current income level - my assets are insufficient to pay cash even if I liquidated my taxable investments.)

I think the important points are to manage the risks you take and the unnecessary expenses you incur and deal with the consequences when you fail. Failure by itself is not the problem, though some people seem to see it so. Besides, sometimes you need to take a few chances in life for life to be worth living.

- Joel

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305941 of 308232
Subject: Re: Credit card debt Date: 9/14/2012 8:46 PM
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joelcorley: "I just don't see how voting or statistics have anything to do with xtn's statements."

Did you see my post regarding idiomatic expresssions?

Definition of AWFUL

1 : inspiring awe
3 : extremely disagreeable or objectionable <awful food>

If by consensus of the board, awful is only used in connection with definition 3, but you and xtn insist upon using it only for definition 1, do not see how that might lead to less understanding and also possible hurt feelings?

"Are you suggesting I should mold my definitions and opinions around data samples? Isn't that a snobbish way of saying, we should care what people think? About Popular Opinion? A.K.A. Political Correctness?"

No. The reason to care is that the communication is better, and not worse. If you (or I) use a word, even if correctly, that is not understood by the average reader, then have we really communicated our idea? Or in this case, understood with an entirely definition then you intended.

"xtn was just extrapolating from his definition of LBYM. Apparently my definition and his are similar. And I don't think my definitions really need to be molded around other people's opinions. It's quite possible for me to be right and (almost) everyone else to be wrong. It may or may not be true in this case; but it's possible."

While it is possible for you to be right and everyone else to be wrong; it is also possible for you to be wrong, and the majority right.

"Now if someone wants to make a rational argument for why LBYM shouldn't be defined that way, I'll listen. If I find the reasoning sound, I might change my definition. If I find it faulty, I won't. If I find it irrational or absurd, I might even rebut - even if it's not popular.

I'm sorry Booa, but I've still not heard a good argument for excluding life-saving medical care from the definition of LBYM. And I'm certainly not going to change my mind just because I was brow-beaten in a public forum for having an unpopular opinion.

With that out of the way, I would also say you should do what you must to save your husband's life. I certainly wouldn't fault you for it. I would even wish you both the best."


You make the argument yourself. "I would also say you should do what you must to save your husband's life. I certainly wouldn't fault you for it. I would even wish you both the best."

I hesitate to speak for the board, when I discuss LAYM, it is the context of choices that can reasonably be postponed without undo physical harm, and ones for which the spender might reasonable expect a chiding for LAYM.

As we all know, that first depends upon one's means.

But if you say that one should do it and you wouldn't fault them for doing so, then I do not consider it LAYM, and based upon most of the other posters on this board apparently do not either. And even you do not appear to be particuarly bothered about it.

"Finally, I would argue there are other valid reasons to live above your means. For instance, I would consider borrowing money to attend college living above your mean. And I wouldn't fault someone for doing it. (OK, I might fault them for borrow too much on a degree that won't repay the loan.) I would also say paying for a mortgage might be living above your means - at least if you don't have assets on-hand to pay it off. Of course in that case, you could rationalize that you're saving on rent. But either of these cases I think you are taking on a risk that can turn into a slippery slope if your not careful - and they're still living above your means. (I'm in the process of buying a house that costs too much. I can "afford it" only because of my current income level - my assets are insufficient to pay cash even if I liquidated my taxable investments.)"

So any borrower is technically LAYM? The US government, many (if not most) corporations are all LA their means? I suggest that while that may be technically accurate, it makes the definition essentially useless. Are you familiar with the Life-sycle model and the behavioral life cycle models of intertemporal consumption in Economics and Maslow's hierarchy of needs. Breathing (i.e., continued life) is on the very first level.

"I think the important points are to manage the risks you take and the unnecessary expenses you incur and deal with the consequences when you fail."

I agree.

"Failure by itself is not the problem, though some people seem to see it so."

Failure is always a problem. Sometimes one recovers and learns something, but not always, either as to survival or learning something assuming survival.

"Besides, sometimes you need to take a few chances in life for life to be worth living."

That seems rather glib to me to write to someone whose spouse "was going through chemo recently," presumably for cancer "and is having surgery in two weeks", and so unlike the you I am accustomed to reading.

Regards, JAFO

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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305942 of 308232
Subject: Re: Credit card debt Date: 9/14/2012 11:17 PM
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Now if someone wants to make a rational argument for why LBYM shouldn't be defined that way, I'll listen.

OK. I'll take a shot at it.

I'm going to start off by saying that I don't read every post on this board - far from it. I'd say I browse the more recommended posts and the threads those are in. So I'm not going to say I am an expert on this board.

But my limited observations seem to tell me that the term LBYM is more than just a mechanical calculation of assets, liabilities, income and expenses. It's carries value judgements along with it.

Those who LBYM are good people. They are responsible. They are doing the right thing. They are worthy of respect. Carried to an excess, they do no wrong financially, they only make correct decisions, they are the pillars of our community.

Those who Live Above Their Means are the bad people. They need to be corrected. They must change their ways. The are headed to ruin, and are the leeches of society. If they won't take the advice of the good LBYM people and amend their ways, they deserve what they get.

Am I making a bit of a caricature out of these descriptions? Of course. Caricature is based on truth, making the truth larger than life so it will be more visible.

But I hope you get my point. There is more going on than just running the numbers when you say someone is or isn't LBYM.

--Peter

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Author: reallyalldone Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305943 of 308232
Subject: Re: Credit card debt Date: 9/15/2012 1:22 AM
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There is more going on than just running the numbers when you say someone is or isn't LBYM.

I disagree. It is about numbers no matter how you want to twist the definition. I'll pull out the cancer card-father, sister, husband all died.

I'll also pull out the health care debate.

There are limited resources for many things and choices have to be made. My husband and I did have financial choices to make during his illness. To pretend health care isn't part of a financial equation is silly. To quote bills that I did not have to pay would be silly. I will say that with an unknown future and unknown expenses, there can be difficult medical choices.

However, the expenses are either within your means or not and yes, it is just about numbers.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305944 of 308232
Subject: Re: Credit card debt Date: 9/15/2012 2:17 AM
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However, the expenses are either within your means or not and yes, it is just about numbers.

I'm sure that absolutely no one is saying that money is irrelevant in spending for health care. Of course, it is relevant and funds, or lack thereof, can have a significant impact on the care that is received or nor received.

That isn't the issue. The issue is whether going to into debt paying for medical care = particularly in serious situations - is living beyond your means. One could argue, I guess, that if you can't pay cash for any middle bill no matter the circumstances and no matter how high that one is living beyond one's means.

That is utterly divorcing that phrase from the value judgment that is implicit in using the term. When you say that John and Mary are living above their means the person hearing that is thinking that they are going on vacations and buying luxury cars, etc. not that Mary had $250,000 in emergency medical expenses. (yes, yes, one could argue that Mary should have had better insurance -- for this hypothetical just assume she is entirely blameless as her insurance carrier went broke suddenly and failed to pay her already incurred expense).

When people here say that someone is living above their means it isn't a compliment and isn't sympathetic. It is, in fact, an insult.

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Author: Jeanwa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305945 of 308232
Subject: Re: Credit card debt Date: 9/15/2012 11:01 AM
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That is utterly divorcing that phrase from the value judgment that is implicit in using the term. When you say that John and Mary are living above their means the person hearing that is thinking that they are going on vacations and buying luxury cars, etc. not that Mary had $250,000 in emergency medical expenses. (yes, yes, one could argue that Mary should have had better insurance -- for this hypothetical just assume she is entirely blameless as her insurance carrier went broke suddenly and failed to pay her already incurred expense).

When people here say that someone is living above their means it isn't a compliment and isn't sympathetic. It is, in fact, an insult.

============================

I don't think Mary's situation is very common, but what do I know.

However, if Mary had not purchased insurance, had not built up an emergency fund, bought luxury cars, new furniture and vacations all paid for; then had a $250,000 medical emergency she couldn't pay for would she have been living beyond her means?

Hey, the debt is for medical expenses so it's ok, right?

I know people like "my" Mary. They don't have employer insurance, but are young and healthy, so don't buy their own either. They spend their all their money on other stuff. Then complain about medical bills in an emergency.

Jean

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305946 of 308232
Subject: Re: Credit card debt Date: 9/15/2012 2:31 PM
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Oh for an edit button!

***any middle bill

should be:

any medical bill

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305947 of 308232
Subject: Re: Credit card debt Date: 9/15/2012 2:34 PM
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I would say that anyone who is spending 100% of what they earn and don't save and don't have an efund is living above their means, regardless of whether they have an emergency (medical or otherwise).

However, it is the lack of savings and the spending all you earn that would cause me to say they are living above their means. It isn't the medical bill.

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Author: Jeanwa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305948 of 308232
Subject: Re: Credit card debt Date: 9/15/2012 4:22 PM
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I would say that anyone who is spending 100% of what they earn and don't save and don't have an efund is living above their means, regardless of whether they have an emergency (medical or otherwise).

However, it is the lack of savings and the spending all you earn that would cause me to say they are living above their means. It isn't the medical bill.

==========================================

But that wasn't where the thread was. It started with the comment that medical debt and furniture debt were both subsets of living beyond your means.

I agree with you that there are sometimes unforeseen events, like the insurance company folding, that can't be accounted for. But medical expenses should be part of one's budget.

Jean

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305949 of 308232
Subject: Re: Credit card debt Date: 9/15/2012 10:31 PM
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I agree with you that there are sometimes unforeseen events, like the insurance company folding, that can't be accounted for. But medical expenses should be part of one's budget.

Even people who budget for medical expenses and who have health insurance can be blindsided if the insurance company refuses to pay for certain treatments. And some kinds of insurance will only pay up to a certain amount, or have other requirements. I've been lucky in having my health insurance cover the vast majority of my expenses. There are other people whose employers chose a cheaper package, and who don't have full coverage.

Nancy

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Author: legalwordwarrior Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305950 of 308232
Subject: Re: Credit card debt Date: 9/16/2012 12:30 PM
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I agree with you that there are sometimes unforeseen events, like the insurance company folding, that can't be accounted for. But medical expenses should be part of one's budget.

But how much should you have set asoide for unexpected medical expenses. I pay quite a bit for my insurance premiums. Fortunately, I have an employer who picks up the majority of cost. But if I were to have some sort of emergency that wasn't fully covered, how much should I have set aside? $1,000? $10,000?, $100,000?

I always thought the whole point of health insurance was supposed to be that you take care of yourself, and if you have an unexpected health emergency, that expense would be covered. Now, what I see is that some things, like prescriptions, are covered, but other things, like some treatments or surgeries, are not. But I don't have a crystal ball to say what treatment or surgery I might need in the future, and no way to estimate how much this not yet accounted for expense might cost. So does that mean no matter how much I have in an efund, it's not enough?

LWW

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305951 of 308232
Subject: Re: Credit card debt Date: 9/16/2012 2:17 PM
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The last surgery I had I ended paying about $12K out of pocket, despite the $5K "limit" in the insurance policy. And the things I thought were in-network and had studied to be sure I'd be covered, weren't totally (yeah...did we tell you that your anethesiologist - working AT the in-network hospital - isn't ACTUALLY part of your network?).

The thing about medical debt is that you don't know what you will have until you have it. You just get blindsided by it. You can't plan for it really, except to have an insurance policy, hope it remains valid if you get sick (ie you can keep working if its an employer-provided policy), and hope it covers what you think it will cover (mine didn't).

Living Below Your Means implies some idea of planfulness and budgeting, no matter how variable and vague. Medical debt doesn't fit into this idea of budgeting. It's the only thing I can think of for which you don't actually know what you will spend until after you have already spent it. I mean, if you went to the grocery and there were no prices posted, and the wouldn't tell you until after you committed to pay what things cost, there would be no way to manage. "Oh, that orange that was $2 last week? It's $1500 today. You don't have that at hand? Oh no - we won't take the orange back - you just need to give us $1500 - sorry." That's not a model in which the concept of LBYM or LAYM makes any sense.

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Author: legalwordwarrior Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305952 of 308232
Subject: Re: Credit card debt Date: 9/16/2012 10:02 PM
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The thing about medical debt is that you don't know what you will have until you have it. You just get blindsided by it. You can't plan for it really, except to have an insurance policy, hope it remains valid if you get sick (ie you can keep working if its an employer-provided policy), and hope it covers what you think it will cover (mine didn't).

Ah yes, the great in-network out of network loophole. We've been stung on that a couple of times. Once, when my daughter was having an allergic reaction to Mom's cats. After calling the PAN and being told to take her to the out of network emergency room, they turned around and didn't want to pay for the trip.

Now, my employer has changed our plan, and the clinic we've used for over 20 years is considered out of network, although they are claiming (right now) that they will honor the limits and copays of our insurance as if it was in-network. I don't trust them and am currently looking for a new doctor who is definitely in-network.

LWW

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305953 of 308232
Subject: Re: Credit card debt Date: 9/16/2012 10:25 PM
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Ah yes, the great in-network out of network loophole. We've been stung on that a couple of times. Once, when my daughter was having an allergic reaction to Mom's cats. After calling the PAN and being told to take her to the out of network emergency room, they turned around and didn't want to pay for the trip.

Years ago, when I was looking through the booklet from the insurance company while looking for a PCP I deliberately picked one who worked for Mass General because it was clear that every doctor at Mass General was part of the network, and I wouldn't have to go crazy trying to find in-network specialists.

Nancy

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Author: InconclusiveFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305954 of 308232
Subject: Re: Credit card debt Date: 9/17/2012 8:00 AM
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Another thing about medical debt is that it isn't always what it seems. My Mom was in the hospital a number of years ago, and we started getting bills from doctors we never even heard of for vague services. I tried to challenge the business office, asking them to tell me what services the doctor provided and was ignored and ultimately sent to collection. I helped Mom formally challenge the bill using her rights under the Fair Debt Collection Practices Act, asking for documentation. Guess what? They couldn't provide any, we never heard from them again, and there was no impact to her credit rating.

When reviewing medical bills, one still needs to look carfully - as they say, caveat emptor.

http://www.ftc.gov/os/statutes/fdcpa/fdcpact.shtm

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Author: NoIDAtAll Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305955 of 308232
Subject: Re: Credit card debt Date: 9/17/2012 8:08 AM
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Around 7 or so years ago I had a seizure outside of my apartment while unloading my car following a robust BBQ in the hot sun that I threw for my brother when he and his wife returned to the area after a year+ long recovery from a near fatal auto accident. Apparently one of my neighbors panicked and called 911 and an ambulance was sent. When the ambulance arrived, I regained consciousness and told them that I was fine, but the attendants advised that they were required to take anyone they found unconscious to the hospital, forced me onto the gurney, strapped me down and took me to a local hospital about 2 miles away.

I got a bill from the ambulance company for well over $500 and sent it to my insurer, Golden Rule. Golden Rule wasn't able to reprice the charge with the provider. I called the ambulance company and spoke with a person in their billing department and asked him to consider repricing the bill for me, advising him that I had, in fact, tried to refuse the 2-mile ride, but was forced to take it by their personnel. He advised me that they would not because they were not a participant in Golden Rule's PPO. He said that if the insurer had been Blue Cross/Blue Shield or United Health Care, they would, of course, reprice the charges. I advised the gentleman that I was a licensed agent for Golden Rule and United Health Care and asked him if he was aware that Golden Rule was a United Health Care company. He said that he did not, looked it up on the Internet and allowed the repricing, instantly reducing the bill by around 1/2. He asked if I wanted to pay that amount then, to which I replied that I did - I didn't wish to risk that someone else in their company might decide a loophole existed later and reverse the repricing. Golden Rule later changed their PPO to their parent company's.

Bob

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305956 of 308232
Subject: Re: Credit card debt Date: 9/17/2012 11:21 AM
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I've a very logical, literal person, and often have trouble realizing the emotional effect words can have until my foot is already in my mouth.

Don't you mean fingers, not mouth.


...until my foot is already in my fingers? I don't get it.

xtn

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305957 of 308232
Subject: Re: Credit card debt Date: 9/17/2012 11:22 AM
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I can explain what set everyone off. In the post you responded to I mentioned several different ways people could get into debt. When you responded, you put medical care in the exact same category as furnishing a house.

Most of us don't put them in the same category, because furnishing a house is something that can be delayed until you have the money for it, so going into debt for it is unnecessary debt. Medical costs, particularly the crucial kind that can't be delayed, might be termed a necessary debt, and most of us consider the two as being very different. We were upset at what was perceived as callous disregard for something that can be a life-or-death matter.



Various items on an office desk may be grouped in several different ways, depending on what property you are identifying. If you are identifying the ability to attach/hold papers, then you might group together the stapler, the paper clips and the push-pins. If you're identifying by size and weight, then the stapler will be in a very different sub-set along with the hole punch and the electric pencil sharpener. You might group them according to color, or cost, or frequency of use, or whatever other criteria you might come up with.

You lumped medical costs and home furnishings together as ways people could get into debt, and I grouped them together as things that might be above one's means. Why is my grouping hurtful and your is not? I simply grouped by a different property.

I don't think I implied in any way, shape or form that I was grouping medical costs with home furnishings according to need, according to emotional worth, according to value obtained, or according to any other metric than whether they were affordable or not.

I do not have a callous disregard for necessary medical treatments. I do not think less of anybody who gets them even if they are unaffordable. I do not group them along with home furnishing in any way other than the one I specifically posted.

So I think I do understand what set everybody off. I failed to predict that everybody was going to infer those types of associations even though I did not imply them. My failure has lead to hurt feelings, and for that I regret ever posting in the first place. I certainly wasn't trying to be hurtful at all. I'm really ashamed that Booa felt so much personal pain over it.

xtn

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305958 of 308232
Subject: Re: Credit card debt Date: 9/17/2012 11:36 AM
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...until my foot is already in my fingers? I don't get it.

This is a message board. You are not speaking. You are typing. Your mouth is not involved when posting. I was being literal. It was a joke.

PSU

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305959 of 308232
Subject: Re: Credit card debt Date: 9/17/2012 11:50 AM
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So I think I do understand what set everybody off. I failed to predict that everybody was going to infer those types of associations even though I did not imply them. My failure has lead to hurt feelings, and for that I regret ever posting in the first place. I certainly wasn't trying to be hurtful at all. I'm really ashamed that Booa felt so much personal pain over it.

Thank you. After I read your response to the first set of reactions I realized that you hadn't intended to paint people with medical debt with the same brush we use for cruises and bling. But the perception that you were doing so was upsetting.

As I said in an earlier response, it's possible to separate heedless, unnecessary debt, from crucial, necessary debt. Perhaps, if there is another occasion, you might want to clarify or explain the difference before the board erupts?

Nancy
it's been a bad couple of weeks at this end, too.

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Author: agyjdgphil Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305960 of 308232
Subject: Re: Credit card debt Date: 9/17/2012 1:07 PM
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And as long as we're being REALLY literal, it's worth noting that one's foot is not ever literally in one's mouth....;)

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305961 of 308232
Subject: Re: Credit card debt Date: 9/17/2012 1:27 PM
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And as long as we're being REALLY literal, it's worth noting that one's foot is not ever literally in one's mouth....;)


Mine used to fit there, at least when I'm a was a kid.

Now, alas, I'm not nearly as flexible and it's a figure of speech.



Seattle Pioneer

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305962 of 308232
Subject: Re: Credit card debt Date: 9/17/2012 1:31 PM
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And as long as we're being REALLY literal, it's worth noting that one's foot is not ever literally in one's mouth....;)



You are wrong:



http://www.youtube.com/watch?v=62jCx3HOON8



More evidence you can find anything on u-tube.



Seattle Pioneer

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305963 of 308232
Subject: Re: Credit card debt Date: 9/17/2012 2:51 PM
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Perhaps, if there is another occasion, you might want to clarify or explain the difference before the board erupts?


Nancy,

I will certainly do so if I am able to predict a problem. I regret that I fail to foresee such things occasionally, but it happens. I do attempt to be clear and precise, but different people interpret things in different ways. I cannot control that, and I will not start sticking disclaimers and explanations onto every post I make just to cover those rare incidences.

xtn

PS - Thanks for being civil throughout this discussion.

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Author: legalwordwarrior Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305964 of 308232
Subject: Re: Credit card debt Date: 9/17/2012 2:57 PM
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Years ago, when I was looking through the booklet from the insurance company while looking for a PCP I deliberately picked one who worked for Mass General because it was clear that every doctor at Mass General was part of the network, and I wouldn't have to go crazy trying to find in-network specialists.

I thought that was what I was doing with S&W. They are currently building a new hospital and they have contract with one of our local hospitals for services. Unfortunately, my employer decided that it would be "cheaper" for us to go with BCBS PPO. So far, everything I've seen indictes that while my monthly premium cost will go down by a few dollars,everything related to specialists and surgical treatments will go up significantly. At this point I've suspended my PT for my neck because we aren't sure how much of it will be covered under the new plan and I can't afford to pay the specialist co-pay and then discover that I have to pay a huge additional amount every week.

LWW

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305965 of 308232
Subject: Re: Credit card debt Date: 9/17/2012 3:05 PM
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Thanks for being civil throughout this discussion.

I'm trying to channel my mother.

Nancy

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Author: agyjdgphil Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305966 of 308232
Subject: Re: Credit card debt Date: 9/17/2012 4:12 PM
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<You are wrong:



http://www.youtube.com/watch?v=62jCx3HOON8



More evidence you can find anything on u-tube.



Seattle Pioneer>

I stand corrected! :) I wasn't thinking about babies, but I should know not to use "never" (not ever) or "always"...

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305968 of 308232
Subject: Re: Credit card debt Date: 9/18/2012 9:25 AM
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And as long as we're being REALLY literal, it's worth noting that one's foot is not ever literally in one's mouth....;)

That may be true but some people have their heads up their butt. I have photo evidence.

http://www.wayodd.com/head-up-your-ass/v/4735/

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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305972 of 308232
Subject: Re: Credit card debt Date: 9/19/2012 12:21 PM
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InconclusiveFool,

You wrote, Another thing about medical debt is that it isn't always what it seems. My Mom was in the hospital a number of years ago, and we started getting bills from doctors we never even heard of for vague services. I tried to challenge the business office, asking them to tell me what services the doctor provided and was ignored and ultimately sent to collection. I helped Mom formally challenge the bill using her rights under the Fair Debt Collection Practices Act, asking for documentation. Guess what? They couldn't provide any, we never heard from them again, and there was no impact to her credit rating.

I've been stung by the "not in network" issue before. Most PPOs will do something they call a "wrap" where if you've made a good faith effort to get an in-plan surgeon and hospital, they'll cover things like the anesthesiology. They won't always do it though unless you call and escalate your complaint.

However, I've been leery about being successful at getting the insurance company to do a wrap even though I've managed it a couple of time. So for non-emergency procedures, I've always:

1. Asked a written estimate from the surgeon / physician.
2. Asked for a list of hospitals he'll work at and select the hospital from the in-plan list.
3. Asked for a list of other physicians, specialists, anesthesiology or independent technicians that need to be scheduled.
4. Selected and scheduled everyone myself.

This has only failed me once. (At least once I started doing it. And you might be surprised how many time my ex and I have been in the hospital, even though I'm fairly healthy.)

In that one case (back in the '90s), my ex was having her gall bladder removed. Another surgeon scrubbed in without consulting with me. When I confronted the surgeon, he said the operation went smoothly and was routine. In fact, he finished a full hour ahead of schedule. I then asked him if this would make any difference on what his office billed for the procedure. He said no. (His office had already quoted a figure to me in writing.)

I then wrote the second surgeon's office and copied my insurer and accused the surgeon of fraud - outlining my case, telling the insurer I have no intention of paying this bill and the insurer shouldn't either, and that if I see another demand for payment I'd take the doctor to small claims court.

It worked. I never heard from that doctor's office again.

Of course I wouldn't recommend you threaten a doctor with litigation - at least not unless you are serious. And I'm not saying you'll always win such a case either. But I think if the doctor has no good basis for a claim and you tell them and your insurer why you think it's fraud, I think there is a fair chance they'll back down ... even before the bill is sent to collections.

- Joel

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Author: InconclusiveFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305973 of 308232
Subject: Re: Credit card debt Date: 9/19/2012 5:55 PM
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"Of course I wouldn't recommend you threaten a doctor with litigation - at least not unless you are serious."

Very good points. In all honesty, when we asked the doctor's office for more justification on what services they provided, our intention was not to try and skip on paying the bill. There was no previous record anywhere of this doctor providing a service, and then out of nowhere a bill arrived in the mail. All we wanted was proof and they were unable/unwilling to provide that. I can only surmise that they thought a collection agency would scare my Mom, but they don't know her very well. Her attitude was, "let them take me to court, and I'll tell the judge exactly what happened." We never got that far, and the entire matter went away.

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305974 of 308232
Subject: Re: Credit card debt Date: 9/19/2012 10:50 PM
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<<Very good points. In all honesty, when we asked the doctor's office for more justification on what services they provided, our intention was not to try and skip on paying the bill. There was no previous record anywhere of this doctor providing a service, and then out of nowhere a bill arrived in the mail. All we wanted was proof and they were unable/unwilling to provide that. >>


I had good fun turning the tables on a doctor one time.


I got a call from a woman asking for service on her furnace. I made arrangements to come right out to make repairs, and she agreed to my fee of "$85 for an hour or less."


When I got to the address, no one was there and I left my bill for the $95.

The next day I got a call from the woman, who said she was a doctor and that she jad been called in unexpectedly to the hospital. She wanted me to waive the bill and come back out to make repairs on her furnace.

I refused to do either. If she wasn't able to keep the appointment she made --- fine. but she owed me for my time. She refused to pay and I refused to go out AGAIN to make repairs.

With any luck she froze her tush off for a few extra days until she found someone to make repairs when she happened to be home.



Seattle Pioneer

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Author: shirehobbit Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305989 of 308232
Subject: Re: Credit card debt Date: 9/23/2012 2:08 PM
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>> I have recently found out that we owe a lot in credit card debt.Does it make sense to borrow from my IRA or 401 K to pay off the credit cards?

Hi Dede,

I read through your thread (which veered off to the subject of medical debt) and noticed with dismay that you haven't posted again.

I hope you are finding ways to pay off your debt which won't harm your future. I paid off over 40k in credit card debut, but early in my misadventures of debt and poor financial habits I borrowed against my 401(k), and later drained it (poor choices on my part because I have less money for retirement and the cost of living keeps going up and up). Later I racked up even greater cc debt.

I have been debt free since October 2007 and am working on funding my retirement while "living below my means". I've always had a "spend it until it is gone" mentality (be it card cards or cash).

Now that I'm back to living on a monthly budget I've recently switched my charity/cause column from annual to monthly (and upped the amount). I am excited because this means I now have 12 different charities or causes I can contribute to in a year instead of just one. I couldn't have done without budgeting.

When you are debit in debt I believe that the first step is to figure out where your money is going. Sometimes you will be amazed at how much you've been spending in a certain category. The second step is to create a budget so that you can decide where you want to channel your money. The people on this board can help you with this.

I hope we will hear from you soon.

Sincerely,

Shire

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Author: ishtarastarte Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 306690 of 308232
Subject: Re: Credit card debt Date: 1/9/2013 9:12 PM
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I meant to send this email only, so I'm fool alerting it.

Whooops.

Ishtar

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