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EPISODE 4 - HOW I (ALMOST) CASH FLOWED BRACES

money management podcasts Aug 08, 2019

This was a $5,000 unplanned expense that I almost panicked over!  Has this ever happened to you?  Did you have a big unplanned expense that came out of nowhere?  It could completely derail your progress on your financial goals.  Listen to how I made it work by using my company benefits and some clever financial hacks to get it to less than $2,000.  ​

 

Transcription

Welcome to Money Talk with Tiff, a podcast where we discuss everything money – from tips and tricks to current events. Follow me on my journey to become debt-free, and meet other cool people along the way. I'm your host, Tiffany Grant, now let's talk money.

Introduction

Recently, my older son needed to get braces. So, if you didn't know, I'm a single mom with two boys – 10 and 5 years old – my 10-year-old needed to get braces. Of course, this was not in any type of budget that I could plan for. So, when the orthodontist said, "and by the way, this is going to cost $5,000." I was like, "whoa, whoa, whoa!" Like how am I going to make this work?

So, I told them to give me quotes and quotes with all the different payment options available. So, if they do a cash discount, give me a quote with that; if they give a discount when I use a debit card, give me a quote for that. So that way, I can see all my options laid out.

Knowing your Options

So from looking at my options, I learned that they did a discount – a pretty significant discount – it's about $500 off – if I was to pay cash. So, I was thinking, and I didn't know if I had $5,000 in cash. Actually, I knew I didn't have $5,000 in cash, but how could I make that work to capitalize on the discount in the deals they were trying to give me.

So, I did some research with my job's benefit because I don't know if you've listened to the first episode, you'd know I have a background in HR, so I'm all for utilizing and optimizing work benefits cos they're really good to you if you know how to use them.

"Look for your choices, pick the best one, then go with it."

– Pat Riley

So, I looked at my job benefits, and I realized that I opted into the FSA (the Flexible Spending Account), and I was funding it to the max, which I believe this year is a little over $2,000, maybe it's like $2,100 (anyway, don't quote me on that, but it's around that amount).

So, I was like, if I do pay for this orthodontics bill, I can get reimbursed from the FSA that I'm already paying for. So, that'll help.

We didn't have orthodontic insurance through my job, so I'm like, that's not going to help. And actually, that's typical when it comes to job benefits. It's very rare to have a plan that covers orthodontia because it's just so expensive. Anyway, I saw that was an option – I'll get reimbursed at least almost half of it by just using my FSA benefits.

So, I'm like, ok, how can I get cash? So, I went to my local bank (my credit union), where I have a credit card, and I made a cash advance for the $5,000. So, I walked to the bank and got the cash advance from my credit card, which has a really low interest rate compared to other credit cards out there – which is why I love credit unions, but that's another episode for another day.

I was able to get the $5,000 in cash at about 10% interest, which is not that big of a deal because I knew that I was going to pay it off pretty quick. So, I got the $5,000, took my son, got the braces, so they knocked it off, you know, the $500, and we got it done.

Financial Discipline

So, then I turned around, and whatever was leftover, I went ahead and put that money back on the credit card. Now, this is where discipline comes into play because I could have just said, "Oh, well, I've already taken the money out, I might as well just use it all," but I said no! I have this money out for this purpose, and once that purpose is fulfilled, I'm putting the excess back from where I got it from. So, I put it back on the card; that way, it already knocked the balance like that.

"We don't have to be smarter than the rest. We have to be more disciplined than the rest."

– Warren Buffet

Then, I took the receipt that they gave me (that same day), and I uploaded it to the FSA website – the Flexible Spending Account website – so they could go ahead and start processing my reimbursement, which they did.

Then, at that time, I was down to about $1,800. So, I went from $5,000 to now, only having to pay $1,800, and I'm happy to report that balance is about to be done.

Conclusion

So, there are always ways to work around big expenses. You just have to be creative, and it's all about awareness – everything goes back to awareness. Once you're aware of your options, you're aware of your benefits; you're aware of how your money flows, and you can make better financial decisions.

So, that's just how I got through a huge expense – unforeseen expense - and made it work with my budget. So, I just say that to you to encourage you. If you get hit with a big car fee, a maintenance fee, your house rent, or whatever…braces. Just make sure you know all your options before you jump in because once you know your options, you can make a better decision.

So that's all I have for today. I kept it short and sweet, and I'll see you next time!

Thank you for listening to the Money Talk with Tiff Podcast. For free resources and materials, head over to moneytalkwitht.com, and while you're there, why not sign up for our newsletter, so you'll never miss an episode. Talk to you soon…

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