Consumer Alerts

Annual Price Of Raising A Child

January 12, 2017 By Twila Van Leer

That Darling Newborn Will Cost You $233K

Ah! Isn’t he/she cute? But take a closer look at what that darling little one is going to cost you over the next 17 years.

According to the United States Department of Agriculture, the estimated costs of rearing a child today is $233,610. That’s about $14,000 annually. The figure is based on a middle-income family with two children. Kids cost more in the city, also, than they do in rural areas.

The estimates, released recently by the department, are based on 2015 data, so the cost probably increased while you weren’t looking last year. The bottom line is about 3 percent higher than for the previous year, an increase that outstrips overall inflation.

It’s enough to give new parents the heebie-jeebies. The figures calculated by the USDA are used by state governments and courts to prepare child support and foster care guidelines.

The bulk of the costs fall right where you’d imagine: housing, food, transportation, health care, education, clothing and miscellaneous expenses.

Housing Costs

In case you had’n’t noticed, housing is expensive, accounting for 26 to 30 percent of a family’s expenditures. The USDA figures the cost for another child by calculating the cost of an added room to a home. The department admits that it doesn’t calculate into the figure such items as a family’s desire to live in more expensive neighborhood that offer better schools and other amenities attractive to those rearing children.

Middle income married-couple families living in the urban Northeast reported the highest costs – about $253,770 for the 17-year total, ocmpared with the urban West at $235,140; the urban South at $221,730 and the urban Midwest at $217,020. The average rural amount was $193,020. Lower-income families averaged $174,690 per child through age 17. At the other extreme, higher-income families will spend, on average, $372,210.

Food Costs

Following housing on the expense list are health care and food. For the middle-income family, food takes up about 18 percent of the child-rearing budget. Child care and education eat up another 16 percent. Education costs have consistently increased each year since 1960, when the USDA started calculating the costs. At that time, education only devoured 2 percent of the child-rearing costs. Child care also has become an increasingly expensive item with more women entering the labor force.

Education Costs

The report doesn’t even consider the costs of higher education, which usually don’t kick in until after the child is 17. The average annual cost of college now is $47,370 for a private institution, $20,090 for a public college.

New parents who groan at the costs of diapers and formula have even bigger surprises ahead. Between the ages from birth to 2, the little cherub costs only around $12,680 while a teenager 15 to 17 will dip into the family’s finances to the tune of about $13,900 each year. The costs of food, transportation, clothing and health care all escalate for the teens.

Good news for larger families! Those with three or more children spend an average of 24 percent less per child. That’s because kids in large families share rooms, wear hand-me-downs, and inherit older siblings’ toys. Child care facilities often offer sibling discounts.

On the flip side, a single child costs an average 27 percent more.

Be Aware Of Health Insurance Glitches

May 2, 2016 By Twila Van Leer

A large percentage of insured Americans receive unexpected bills. — Check to see if your medical appointments are covered by your insurance company. Don’t let your bill be a big surprise.

If you thoroughly understand every twist and turn of your health insurance, you’re one of a rare minority in America. Insurance plans have become so complex it’s hard to tell when you might be stepping outside your network’s coverage.

Unexpected fees

When you are recovering from a medical procedure is not a good time to learn. Unexpected fees might add to the misery. The problem is huge. Nearly a third of insured Americans who have financial difficulties can blame part of the problem on medical bills they were not anticipating, according to a survey conducted by the Kaiser Family Foundation.

Unexpected bills

Some 70 percent of those who received unexpected bills didn’t understand that they were receiving services outside their insurance parameters. Problems often occur when there is a hospitalization in which a number of health professionals are involved. Payment guaranteed to your primary care physician often does not extend to emergency care doctors, anesthesiologists, radiologists and others who provide services.

Out-of-network services

A New York study in 2011 showed that the average cost of out-of-network services was $7,000. Often, medical costs are accrued in an emergency, so it is not likely the patient will be able to ask if those who take over his/her care are on their covered network. They are at the mercy of the system.

How to protect yourself

If you know you are being hospitalized in advance, call the hospital and try to determine who will be involved in your care and if they are part of your network. It isn’t foolproof, since the hospital may not know in advance which individual in a group of experts will take care of you. Also, ask that necessary tests done outside the hospital be sent to network providers.

Call your insurance carrier

If you’ve made those efforts and they don’t fully protect you from unexpected bills, the first thing you should do is call your insurance carrier and tell them the circumstances. Some employer-sponsored plans have policies that consider charges that were made without the patient’s understanding, particularly if they occur during an emergency. Your insurance company may be willing to negotiate with the providers for a lower charge.

Consumer protection agency

See if your state has a consumer protection agency that deals with medical payment issues. At least 10 states do have a program that will help consumers who are hit with unexpected medical charges.

Changing the laws

Experts who have made in-depth studies of the problem say that it will take changes to several laws, usually at the state level, to address the issue. New York has taken steps to protect patients in such instances. Its’ law does not eliminate the fees, but requires the insurance carrier and providers to negotiate.

As the scope of the problem grows, it is likely that resolutions will be sought. In the meanwhile, the majority of patients who are billed for out-of-network services have little recourse except to pay the bills.

Watch Out For Scary Scams

April 3, 2016 By Twila Van Leer

Medicare

Medicare enrollment time is from Oct. 15 through Dec. 7, and there are scammers out there hoping they can trick you out of your Social Security/Medicare number while you are particularly vulnerable. Be wary of the caller who says he/she is a Medicare employee and that the agency is issuing new cards, that their records need updating or that they can help you with re-enrollment. Don’t you believe it.

Some of these scammers may say you have past-due medical bills. Genuine Medicare employees will never call and ask you for personal information over the phone. They will not visit your home pretending to solicit information the agency already has.

Utility Company

As the weather cools, such unscrupulous frauds may show up saying they are from the local utility company and claiming that you have unpaid bills. They may ask that you pay with your prepaid debit card, which makes it hard to trace. They may suggest that you pay cash and offer to send someone, supposedly a bona fide utility employee, to pick it up.

Again, don’t you believe it. Utilities don’t work that way. They will always send at least one and usually several reminders if you are truly behind, and they do not send employees to pick up payment.

Home Inspections

Another ploy that allows a scammer to dip into your financial resources is the man who shows up to “inspect” your home and supposedly finds serious repairs that need to be taken care of immediately. They may suggest that your chimneys, HVAC ducts or furnace need cleaning. Usually they don’t. Much better to rely on someone with whom you are familiar to do such upkeep.

Investment

At the final quarter of the year, many people are looking for little tweaks they can make to their investments, with an eye to improving their tax situation. If you receive invitations to free lunch seminars to be “educated” about investments, be aware you could end up paying dearly. Such gatherings often are sales pitches for bogus investments. Words such as “risk-free,” “guaranteed” or “limited time” may be clues that you are about to be scammed. Common investment hoaxes focus on oil and gas, precious metals, promissory notes, life settlements and long-maturity annuities. Before you head out for a free lunch, visit brokercheck.finra.org to learn about past lawsuits, bankruptcy filings and other possible irregularities.

Charity Organizations

When the holiday spirit begins to loosen purse strings, scammers come out of the woodwork by the droves. Last year, the focus was ebola. Every natural disaster brings out those who appeal to your humanity to help in the recovery process. Many of the scams are custom-designed for the elderly and they may solicit help for police, firemen or children. If you feel uncomfortable, ask the solicitor to provide you with materials about the suspect charity so you can study them before making a donation. Or go to give.org, charitynavigator.org or the agency in your own state that regulates charities. This information is listed at nasconet.org.

There are dangers of fraud and scam all the time, but especially in the next few months. Don’t start the holiday time of year by letting a scammer treat you to a trick.

Identity Theft Hits 15 Million U.S. Residents

February 29, 2016 By Twila Van Leer

Identity theft is a more rampant than ever. — 15 million United States residents have their identities used fraudulently each year.

Identity theft hits 15 million residents. It seems that no matter what steps people take today to protect their identity against fraud, those who do the fraud have a quick way to get around them.

Jean Chatsky, an American financial journalist, author and motivational speaker, has made a list of the most recent methods identity thieves use to deprive you of your identity. Read them and then act accordingly to be sure you aren’t the next victim.

Approximately 15 million United States residents have their identities used fraudulently each year with financial losses totaling upwards of $50 billion.

Identity Theft Through E-Mail

The conman sends you a message saying it is from a retailer, the U.S. Postal Service or other common deliverer regarding a package that can’t be delivered. The message includes a fake email address that you are supposed to use to resolve the problem. It asks for details about your identity. Or it may ask you to fill out a form and take it to your post office. That download may install malware onto your computer that feeds more information to the bad guys.

Email Attachments

Never click on a link or attachment you receive in an email unless you know the sender. If, in fact, you have a delivery that couldn’t be made, you will receive written notice on your door or in the mailbox from the sender. Contact the shipper.

Smishing

Smishing is a new coined word that is first cousin to phishing. But instead of trying to get you to take their bait via email, the fraudsters use text messages. Usually it involves a message about a great deal, a deep discount. To take advantage of the “bargain,” you divulge your personal information, and set your self up to become a victim. Don’t pay attention to any text from someone you are not familiar with. Legitimate deals come directly from the company. Sometimes they come as a text, but you have to sign up to receive them.

Social Media Messages

The crooks pay attention to your social media messages to figure out how to steal your identity. If you post on Facebook or Twitter that you just had a great experience at a restaurant or retailer, they may call, text or email you pretending to be from the business with whom you were pleased. They may tell you your credit card didn’t go through and ask for the information. Then they have the means to set up a false account in your name. Bye-bye security.

Bogus Charities

Using fake addresses and websites to appeal to you to support a “good cause,” they weasel pertinent information from you. These scams often follow a highly-publicized disaster to take advantage or your empathy for those who have been negatively affected. Hurricane Katrina spawned thousands of fake “charities.” If you want to support good works, give via well-known and reputable websites. Or write a check. If you are solicited by email or text, never click on a link. Consider making your donation to a large, well-recognized entity such as Red Cross, Doctors Without Borders or others that you know to be bona fide organizations.

The people who would use electronics means to cheat you make it a full-time job. Stay informed so you’re always a step ahead of them.

8 Tips For Buying In Bulk From Costco

February 18, 2016 By Sherry Tingley

shopping in bulk — Shopping at Costco in Marina Del Rey, California. Photo credit: GABRIEL BOUYS/AFP/Getty Images

Loading up the cart with bargain-priced items in amounts calculated to last a lifetime, if not forever, is a popular option for many Americans. And the experts say it can be a very good approach, but they warn that the shopping should be focused and strategic to get the most for your buck.

The big-time bulk marketers, such as Costco, Sam’s Club and BJ’s Wholesale, are experts. They use pricing ploys, store layout, product placement and tempting sales to ensure that you return often. They even choose their shopping carts – larger than normal – to entice you into putting just one more item – or a half dozen – into the day’s shopping load.

Costco opened its first store in San Diego, Calif., in 1976. Today it has 468 stores in the U.S. and Puerto Rico, with 33 more in Mexico. They average $164 million in sales annually, overall net revenue of $112 billion overall in 2014.

Tip #1 Special Pricing Available For Large Quantity Buyers

Costco has even lower pricing for consumers who spend more than $10,000 when ordering. You can request special price quotes for specific items.

Tip #2 Factor Membership Fees In Your Budget

The annual membership that customers purchase is a major source of the income. The stores can offer good prices because of the membership fee. So customers need to figure in the fee when they decide how much they are actually saving.

Tip #3 Double Check Your Prices

The outlets also manipulate prices on various items to make the savings seem more than they really are. Pay a reduced price for milk, for instance, and you may not realize that you are paying more for the chocolate you intend to put into the milk than you might have done at another grocery. In the trade, they call this strategy “high-low.”

Tip #4 Larger Shopping Carts Means More Spending

Factors that lure shoppers into buying more include the size of the baskets. Since the 1970s, they have tripled and the psychological result is enormous. The urge to fill up the space may lead a customer to pile in more purchases than he or she had intended.

Tip #5 Store Layout Influences Your Spending

Stores are laid out to keep shoppers away from the exits. No bright lights, no windows or other distractions are available to keep them from their shopping. Expensive items, such as electronics, are kept at the front of the stores. In comparison, the sales racks seem even cheaper. They change their offerings frequently, so there is always a sense of being on a treasure hunt.

Tip #6 Ask For A Trial Membership

Some sensible strategies for shoppers include: Ask for a trial membership and then track savings to be sure they offset the fee. Don’t assume that large quantities are practical. If your family likes only an occasional bit of cheese, buying it in three-pound blocks isn’t wise. Check prices against those in other regular all-purpose stores. You may find such things as party items, greeting cards, note paper, etc., cheaper at a dollar store. If you don’t expect to buy a huge amount of goods, bypass the shopping cart. Make a list and stick to it. Give yourself a deadline to be in and out. Go directly to the area where your wanted items are stocked and don’t dawdle in the expensive parts of the store.

Tip #7 Returning Items Is Easy

Peterson, of Addicted To Costco recalls once “standing in line behind a man who was trying to return a violin a year and a half after buying it because his daughter didn’t want to play anymore. Costco cheerfully gave him a full refund for the instrument.”

Tip #8 Get A Cheap Lunch

Many families will go to Costco just to get a cheap hot dog or pizza. Costco’s pizzeria’s alone would rank #11 in a list of the biggest Pizzeria’s in the nation. Free samples for shoppers will help put you in a buying mood.