On the Road to Financial Health

Recovering from a serious illness can give you a new perspective–and a new set of financial challenges
MOST MID-LIFE CRISES ARE A BREEZE COMPARED with the one Cheryl Roberts has dealt with over the past year. In August 2005, at 43, she learned she had an aggressive form of breast cancer that had spread to one lymph node. “I had no idea what was going to happen,” says the San Luis Obispo, Calif. real estate appraiser. “It was terrifying.” The next nine months were a painful blur of surgery, chemotherapy and radiation–fortunately, with a happy ending. Roberts finished treatment in April, cancer-free. By June the avid bicyclist had completed a 50-mile ride and returned to work full time–with a new appreciation for just about everything. “I have the rest of my life ahead of me, and that feels awesome,” she says.

The next stage of recovery for Roberts: getting her finances back in shape. While she was undergoing treatment, she was able to work only 12 hours a week and her income, normally around $65,000, dropped by more than two-thirds. As a result, she dipped into savings to help cover her living expenses and to pay the $15,000 in medical bills she incurred for deductibles, co-payments, prescription drugs and other costs not covered by her health insurance. Roberts had routinely socked away about a quarter of her pay before her illness, so she wasn’t forced to take on debt. But the disease stalled progress toward her goals of buying a home and retiring early, and added a major element of uncertainty to her financial outlook. “I’m assuming I’ll live another 50 years,” she says. “But I know the cancer could return, and I don’t know how to plan for that.”

Roberts’ predicament is an all too common one. Many working people who survive serious health problems are forced to drain their savings. Or worse: Medical bills related to illness contribute to one in four bankruptcies in the U.S., according to a 2005 study by Harvard researchers. And even when the damage stops well short of insolvency, the costs associated with a serious health problem can disrupt cherished plans and require a new approach to setting and reaching financial goals.

That said, survivors are just that: survivors. Facing down a health problem calls for grace and determination–qualities that will help power you past serious financial hurdles. “Handling money issues is small potatoes after what I’ve been through,” says Roberts. And just as good medical advice can help with your physical recovery, the right financial advice will help restore your finances. Start with these steps.

Give Yourself a Financial Checkup When you’re battling a serious illness, you aren’t likely to have much time or energy for bill paying, let alone financial planning. Meanwhile, your finances are undergoing radical changes as you deplete your emergency fund (so that’s what that money was for), dip into savings and, possibly, pile up debt. As soon as you’re better, it’s critical to assess your new circumstances–to figure out how much you’re spending (especially if you need ongoing care that isn’t covered by insurance), how much you have left in savings and, perhaps most important, how much you owe.

Once you have a better sense of where you stand, perform financial triage–that is, identify your most threatening money problems and come up with a plan to deal with them. For many people recovering from a serious illness, debt is first on the list. If you’re hard-pressed to make payments on both your credit cards and your outstanding medical bills, focus on paying down the card balances first. Unlike card issuers, most hospitals, doctors and labs don’t charge interest or impose late fees. And their billing offices will often agree to work out a more manageable repayment schedule if you just give them a call.

Rethink Your Risk Tolerance A narrow escape can leave behind a lurking sense of fear. You’ll feel much better if you take steps to manage your risk. Replenish your emergency fund, perhaps building a larger stash if you face the chance of a relapse. Move some (but not all) of your long-term savings from stocks to bonds, at least temporarily, since the potential cost of further treatments effectively reduces your time horizon. “Consider where you’d be if the stock market dropped 35%,” says Milwaukee financial planner Paula Hogan. “Most people coming off a serious illness can’t afford that kind of loss.”

Shore Up Your Insurance Don’t let your medical coverage lapse for even a day. If you then try to buy an individual policy, a new carrier might be able to deny you coverage, citing a pre-existing condition, depending on your state’s laws. If you’re joining a new group plan and you’ve gone without insurance for 63 days or longer, the new carrier can refuse to pay bills related to an existing condition for up to 12 months. To prevent a break in coverage if you’re leaving a job, consider signing up for transitional coverage, known as COBRA, which is available at close to group rates, typically for 18 months. COBRA isn’t cheap. But the costs won’t be nearly as great as footing the full tab for a serious illness yourself.

And if you don’t have one, shop for a disability policy also. A good agent should be able to find a carrier who isn’t scared off by your medical past. But you’ll likely have to wait 12 months before being covered for disabilities related to your recent illness.

Look Before You Leap… Your new lease on life might get you itching to quit your job, travel the world, move to Tahiti or make other major changes that cost a lot of money. Take at least a few months to mull those ideas over. “A basic tenet of financial planning is to avoid making one big life change right after another,” says Hogan. “And a serious disease is truly a life-altering change.”

…But Leap if You Must That said, a brush with mortality sometimes has a side benefit: a deeper understanding of what’s truly important to you. Use your newfound clarity to redefine your goals, and set about reaching them. “I’m no longer interested in money for money’s sake,” says Roberts. “Money is just a tool for living life fully.”

For example, Roberts recently decided to buy her first home, a two-bedroom, $430,000 stucco. The $43,000 down payment wiped out a third of her savings, and the $2,600 monthly mortgage payment is a stretch. Roberts certainly won’t be retiring early now. But she says it’s worth it. “My illness put things in perspective,” she muses. “Why have I saved this money if not to use it for what’s most important to me?”

43% of adults with chronic illness struggle to pay their medical bills.

SOURCE: Commonwealth Fund.

What Big Teeth You Have

By: Teresa Bateman, Children’s Digest

This whole thing started two days before Halloween. I was biking home from my paper route when I heard this terrible howling.

AAAAAAAAAHHHOOOOOOOOO! I slammed on the brakes and skidded to a stop. This was definitely NOT a dog howling. It was a weird sound that rose and fell in the twilight. It made the yellow aspen leaves quiver and sent shivers down my spine.

I glanced over my shoulder at the late October moon. It was full and bright, like a huge eye. I took off, pedaling like a maniac.

The horrible howl came again–closer this time. I was passing my grandmother’s new house. She had just moved here last month. I made a gravel-splattering turn into the driveway. I dumped my bike and ran for the porch. “GRANDMA!” I hollered, pounding on the door. “Let me in!”

The howling stopped abruptly. The sudden quiet was worse than the noise! I could almost feel something sneaking up on me, closing in for the kill. I squeezed myself between the screen and the front door.

“Grandma! It’s me, Tooz, “I called and knocked again.

“Tuesday?’” Grandma said. “Is that you?” She sounded strange.

“Yeah! Let me in!”

There was a long pause. “Uhm, I’m not feeling very well tonight, dear. You can visit some other time.”

The street was empty and quiet. But how long could that Last?

“Well…OK, Grandma. Gotta run!” I grabbed my bike and raced home. I mentioned the noise at dinner that night. “Did you hear that weird howling earlier?” I asked.

“Howling?” Morn said. She and Dad exchanged glances.

“Just a stray dog, I’m sure,” Dad said.

“Right.” Mom quickly agreed. “A stray dog.”

Mom and Dad didn’t seem to give it much thought, I changed the subject.

“I still don’t have a Halloween costume,” I reminded them. “I was thinking of something creepy. Maybe a vampire or a werewolf.”

There was a long silence. “I don’t think that’s such a–” my Father started.

“‘Good idea!” Mom jumped in. “You would make a terrific vampire. We’ll dress you in black and buy you some plastic fangs!”

We finished the costume on Halloween day. It turned out great–especially when I dribbled fake blood down my chin. As night fell, Morn helped me with my makeup–pale white cheeks and bright red lips.

“I’m going to bike over and show Grandma Rose my costume,” I said.

“No,” Mom said. “You can’t go. Grandma is…uh…she isn’t home. She’ll be gone until late. Very late. Yes. That’s it.”

That’s odd, I thought. Grandma Rose never goes anywhere.

I suppose I should have asked why my parents were acting weird. Later it all made sense. At the time, however, I just grabbed a pillow-case and zipped out the door.

My best friend Margaret and I had fun trick-or-treating. My pillowcase bulged by the time I said good-bye to Margaret. The full moon lit up the streets like a spotlight as I walked home.

When I passed Grandma Rose’s house. I was surprised to see a light on.

So she IS home! I thought. Suddenly I got a great idea. I’d give Grandma a little scare! I crept around the edge of the house, flitting from shadow to shadow in my best vampire style. I draped my cape below my eyes and leapt in front of the patio door..

“BOOOOO–AAAAAA–RRRRRGGGH!” My boo turned into a scream as I stared into the house. There sitting in my grandmother’s chair, was a gigantic gray wolf! Its eyes glowed yellow. Drool! fell from its fanged mouth. It was hideous! It Was…it was…

It was watching TV and knitting something out of pink yarn. Knitting?!

Those hypnotic eyes locked on mine. I couldn’t move. The creature came closer…closer. I tried to run, but a furry paw grabbed my wrist and pulled me inside, Trapped! Would I become this foul creature’s midnight snack?

The wolf made a peculiar sound I looked up into a mouthful of sharp teeth. It was choking! No, not choking. It was…laughing!

“What’s so funny?” I shouted.

“Sit down, dear.” the wolf said. “You don’t have to shout. I’m not completely, deaf, you know.”

Strange, I thought. That voice sounds just like my…my…

“…Grandma,” I finished aloud. “What big teeth you have.”

“That’s hardly original,” she remarked, picking up the yam again. She looked at me over her glasses. “You make a nice vampire.”

“You make a nice…werewolf,” I replied lamely. “That is a costume…isn’t it’?”

She grinned toothily. “No, but it only lasts until the moon goes down.”

My mind was numb. 1 tried to sound casual as if this were the most ordinary thing in the world. “Have you, uh, been a werewolf for very long?”

“Since I was about your age,” Grandma answered. “Actually, I’m retired. I leave the big howling to the young wolves now.”

Suddenly my parents’ odd behavior made sense. They must have known all along that Grandma was a…you know.

“This is a lot to think about,” she said. “You go home and get some sleep.”

I grabbed my pillowcase. “OK. See you later…uh, Grandma,” I said.

I walked home like one of those zombies from the old movies. I was almost to my house when suddenly I stopped. You know, I inherited my red hair and funny laugh from my mother. I got my green eyes and long nose from my lather.

I wonder…what exactly did I inherit from my grandma?

The full moon slipped behind the trees as a furry shiver ran up my spine.

Scale Back on the Energy You Use

You'd be Surprised at what Little Things can do

Get an audit Il Fornaio is dusting off the "utility management plans" it developed during the energy crisis that swept California a couple of years ago. Michael Mindel, vice president, marketing, for the 24-unit chain, recommends bringing the gas and electric companies out to do an energy audit. "They were very helpful, suggested hundreds of things — and it's free." Mindel estimates that by implementing many of those suggestions Il Fornaio drove utility costs down a minimum of 20 percent, in some stores as much as 30 percent. Papa Gino's Holding Corp. of Dedham, Massachusetts, just began energy audits of 175 Papa Gino's and 200 D'Angelos stores. The chains are also testing automated energy controllers, programmed to turn off lights, heat and ovens when not in use. Says marketing vice president Michael Mcmanama, "If it generates savings, we will take it chainwide."

Crack down on energy wasters Minding energy basics has meant savings of "hundreds of thousands of dollars" in eight ESPN Zones, says John Pierce, director of marketing. The plasma and LCD screen television monitors the chain now uses draw two to three times the power of conventional TVs, so they are now unplugged at closing. Lutron timers switch off lights; heating and air conditioning units are also on timers. Daily, weekly and monthly preventative maintenance ensures that equipment keeps operating efficiently. And the mammoth Times Square Zone is getting a new revolving front door to stop the cold air that made the cavernous first floor impossible to heat.

Mind the lights Heinemann's, an eight-unit family-dining chain in Milwaukee, is eyeing all of those energy-sapping items in the kitchen as a possible source of money savings. Jim Grafwallner, director of operations, is reminding general managers to keep heat lamps, waffle irons and fryers off until absolutely necessary. Also, some Heinemann's locations have back dining rooms that are used mainly for banquets. If they're not being used, the lights are off. Simple stuff, but also meaningful for a small company. "It's a nickel and dime business," Grafwallner says. "No one wants to pass on price increases."

Love your heat lamp The Dickey's Barbecue Pit chain is coping with high natural gas prices by turning off its barbecue pits. The Dallas-based chain used to run the gas-fired pits at its 65 restaurants 20 to 24 hours a day, using them to keep meats warm after cooking. Now the pits are shut down in the afternoon after about 15 hours, and the barbecued meats are transferred to Metro electric warmers already being used for other items. Roland Dickey, Jr., vice president, says the turnoff cut the utility bill about 8 percent.

Winter survival guide

DON'T GET CAUGHT OUT IN THE COLD

Common sense methods to cut costs, build traffic

Source: Restaurant Business

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