Unsolvable Problems

Unsolvable Problems

General

by | Nov 23, 2018 | General, Weekend Pivot Points

I’ll set the stage: it’s 40 degrees, windy, I’m blindfolded and standing in the woods along with eight others, each of us has our right hand on a rope, the other hand out in front of us hoping we don’t run into each other or bust our noses on a tree.

We’ve been led one by one into the woods to what we can only assume is some kind of rope labyrinth or maze. There we stand awaiting our instructions for the first of our team-building exercises:

Instructor: “Your goal is to find the exit to the rope maze. You must remain blindfolded and keep your right hand on the rope at all times. You may not talk. When you think you’ve found the exit, raise one hand and I’ll let you know if you are correct. If you need help, step away from the rope and raise both hands to ask for help.”

And then the fun begins, as I walk forward taking short, shuffling steps with my right hand on the rope and my left hand outstretched keeping me from running into the person or tree in front of me.

After a few minutes of following the rope in my right hand while listening to the rustling of leaves by other group members and occasionally bumping into the person in front of me, it becomes apparent that we’re walking in some kind of rectangular, loop pattern. Hmmm…how do I escape a loop?

Instructor, again: “Your goal is to find the exit to the rope maze. You must remain blindfolded and keep your right hand on the rope at all times. You may not talk. When you think you’ve found the exit, raise one hand and I’ll let you know if you are correct. If you need help, step away from the rope and raise both hands to ask for help.”

So I continue shuffling around the circle, now on my third or fourth time around, and bumping into the person in front of me, yet again…but (*plot twist*) the person in front of me is clearly someone different than before.

Okkkkkk….so people are getting out…but there’s clearly no exit. What am I missing? There must be a trick or a loophole or something.

At this point, I’m thoroughly confused…and, to be quite honest, a little frustrated because I consider myself to be a good problem-solver.

The romp around the maze continues with no evidence of an exit to be found, and now on lap five and no closer to solving the mystery. The rustling of leaves as others shuffle around the circle has become noticeably quieter. How are people getting out of here? What am I missing? Think harder.

Instructor, again: “When you think you’ve found the exit, raise one hand and I’ll let you know if you are correct. If you need help, step away from the rope and raise both hands to ask for help.”

The sounds around me suggest that most of our group has somehow solved the puzzle and found the exit at this point. Yet, there I am still blindfolded, cold, confused and frustrated wandering hopelessly around the maze again.

Instructor, yet again: “When you think you’ve found the exit, raise one hand and I’ll let you know if you are correct. If you need help, step away from the rope and raise both hands to ask for help.”

Alright, I give up. This is my eighth or ninth time around. The problem is unsolvable. This is hopeless. Clearly, everyone else is more clever than me. So…I step away from the rope and raise both hands to ask for help.

Instructor, in a close, quiet, whispered tone: “Congratulations, you may remove your blindfold and exit the maze.”

 

Here’s what caught my eye this week:

MONEY: 2 Smart Ways Consumers Are Managing Their Holiday Spending (The Motley Fool)
Last year, Americans spent on average $1,143 for the holiday season…while racking up $1,054 in holiday debt. The solution to the holiday spending vs. debt issue is simple: save in advance and set a budget. But…simple is rarely as easy in practice as it sounds in principle.

LIFE: YMCA CAMP PIOMINGO (Brandenburg, KY)
The above-mentioned rope maze activity was one of many team-building/leadership exercises that I got to participate in this past week at Camp Piomingo as part of my local Chamber of Commerce Leadership Class. I’m so glad I got to experience some of the camp activities, and learn more about their summer camps and the overall mission of providing opportunities for kids find out who they are, who they want to be, and to develop confidence and character to become that person. If you have kids or grandkids age 6-16, I highly recommend looking into their overnight summer camps for kids or their occasional day camps for the whole family.

Road Trips & The Stock Market

Road Trips & The Stock Market

General

by | Oct 26, 2018 | General, Weekend Pivot Points

We went on a family trip to Lexington, KY last weekend. It’s usually about a two-hour drive from our house without traffic, construction, or emergency pit stops for the kids (rarely are we this lucky though). We drove the first hour and 45 minutes without any trouble…besides the rain, it was smooth sailing. Until the last 5 miles, that’s when it all changed.

Three exits from our destination, we hit a traffic jam on New Circle Road between Harrodsburg Rd. and Nicholasville Rd. If you’re familiar with Lexington, this is not uncommon on a rainy, Friday evening…almost expected really. Logically, I knew this was easily the shortest route and whatever was slowing down the traffic would likely clear up by the next exit and probably only slow us down by 15-20 minutes.

In reality though…it was 7:30 on a Friday, it was dark, it was raining, our four-year-old was getting restless and hungry, we were out of snacks, and, to top it all off, our 9-month old decided that he was D-O-N-E…DONE being in a car. This is the moment when my best intentions turned into a rational, yet regrettable decision. Sitting in traffic, Google Maps made it clear what to do. There was nothing but dark red on the map for the next mile…but if we exited now and rerouted, nothing but green. So…I decided to follow my impulse and assert my control over the situation by changing course. Fast forward 50 minutes later and we finally arrive at our destination with elevated blood pressure, elevated stress levels…and no time saved.

In hindsight, staying the course and waiting out the traffic would have still gotten us to our destination and likely quicker than changing course. But, in the moment, it can be difficult not to act on impulse and try to assert control in an uncontrollable situation, especially when emotions are running high. Sometimes simply doing nothing is the best option.

***
October has been a rough month for the stock market. This is the second time this year that we’ve experienced this type of volatility and decline. After years of watching the market climb consistently and with little volatility, it’s totally normal to feel nervous when the market goes down. It’s also normal to feel the urge to assert control on the situation and do something. But, in reality, doing nothing and staying the course is more often than not the best option.

Student Loan Forgiveness is Real!

Student Loan Forgiveness is Real!

General

by | Oct 12, 2018 | General, Teachers, Weekend Pivot Points

It’s been 7+ years in the making…but the day finally came! My wife and I get to say “good riddance” to $5,000 of student loan debt thanks to the Teacher Loan Forgiveness program.

I think most people carrying any amount of student loan debt have at least heard mention of the federal student loan forgiveness programs at this point…and I’d venture to guess that a good chunk of people are even relying on these programs to help provide some relief to the student loan burden.

The Teacher Loan Forgiveness (TLF) program is only one of the several federal student loan forgiveness programs available through the US Dept. of Education. The TLF program requires teachers to be employed in a qualified low-income school for five complete and consecutive years. Once the service requirements are met, teachers can have up to $17,500 (amount depends on the subject area taught) of their Direct or Stafford Loans forgiven.

If you’re doing the math in your head…yes, it took seven years of teaching in qualified schools before my wife’s loans satisfied the five-year requirement. Also, if you thought that last paragraph was clear as mud, know that you are not alone in that thought. The student loan forgiveness programs are notorious for their specific (yet confusing) set of requirements and their adherence to them.

In my wife’s case, a three-month gap between teaching contracts after her first year of teaching reset the TLF Program’s service requirement clock. So, although she has taught 7 years at qualifying schools, the first two years didn’t qualify because they didn’t meet the complete and consecutive requirement…a detail we didn’t know until applying for forgiveness after her fifth year of teaching. It’s these finer details that many people (like us) won’t discover until they apply for forgiveness and receive a rejection letter from the Dept. of Education.

If you’re eligible for Teacher Loan Forgiveness, Public Service Loan Forgiveness, or another federal program, I highly encourage you to take a moment to examine the details and requirements today and avoid any confusion and frustration 5-10 years from now. Not sure where to start? This blog post from the Dept. of Education is a good starting point to learn the basic requirements.

Despite all the requirements and hurdles though, if all the “i’s” are dotted and the “t’s” crossed, the program works and the student loan forgiveness is real. Be cautious, be attentive but be hopeful!

Healthcare HRA vs. FSA vs. HSA

Healthcare HRA vs. FSA vs. HSA

Employee Benefits

by | Sep 28, 2018 | Employee Benefits, Teachers, Weekend Pivot Points

It’s the cross-section of everyone’s favorite topics…healthcare and taxes! Trying to navigate the alphabet soup of employee health benefits can be a migraine-inducing task.

Healthcare insurance and expenses continue to rise. An HRA, FSA, and HSA can be a great way to help offset some of the increases. The aforementioned accounts can help you pay for qualified healthcare expenses, like deductibles, copays, coinsurance, and prescription costs, while saving on taxes at the same time.

Here are some important differences you should consider when determining which account is the best fit for your needs:

Type of Tax-Advantaged AccountHealth Reimbursement Arrangement (HRA)Flexible Spending Account (FSA)Health Savings Account (HSA)
Who funds it?Employer-onlyEmployer or EmployeeEmployer or Employee
Who is eligible to use?Only offered in conjunction with employer-provided health plansOnly offered in conjunction with employer-provided health plansMust have a high deductible health plan (HDHP)
How much can you contribute each year?None; 100% employer-funded$2,650Individual: $3,500, Family: $7,000
How much can be rolled over each year?Allowed at employer’s discretionAllowed at employer’s discretion; $500/year maximumFull rollover allowed
Can it be transferred from one employer to another?Portable at employer’s discretionNoFull portability allowed
How is it taxed?Contributions not included in income; tax-free reimbursements for medical expensesContributions not included in income; tax-free reimbursements for medical expensesContributions not included in income; tax-free reimbursements for medical expenses
What can it be used for?Medical, dental, vision, and prescription expenses.Medical, dental, vision, and prescription expenses.Medical, dental, vision, and prescription expenses. COBRA, retiree medical insurance premiums, long-term care premiums/expenses.

Choosing which account or accounts to contribute to and how much to contribute will vary from person-to-person. A good rule of thumb as you begin thinking about these accounts and how much to contribute is to determine how much would be needed to cover your deductible, expected medication costs, anticipated doctor’s visits, etc.

Consider using an online calculator to help start the conversation. Also, don’t be afraid to ask your HR representative as you come across questions or work with your financial planner to help determine the best plan of action for you and your family.

Dependent Care FSA’s

Dependent Care FSA’s

Employee Benefits

by | Sep 28, 2018 | Employee Benefits, Teachers, Weekend Pivot Points

Dependent Care Flexible Spending Accounts are one of my favorite, yet lesser-known employee-benefit options. Child/Dependent care is expensive and a DCFSA can help ease some of the stress on the budget. It can be a great tool for young families, like my own, who will have a significant amount of daycare expenses in a given year.

So…what is it, how does it work, and why should you consider it:

What is a Dependent Care FSA?

It’s a voluntary employee benefit option allowed by some (but not all) employers to help you save money on your family’s child care expenses.

How does it work?

By saving from your paycheck into a Dependent Care FSA, you use pre-tax dollars to pay dependent care expenses. This allows you to shelter a portion of your child care expenses from Federal and State income taxation, and, in many cases, Social Security and Medicare taxation also. This helps to reduce your taxable income and, in turn, may reduce the overall amount of taxes you pay.

Benefits of enrolling?

Tax savings is the main reason for using a Dependent Care FSA. As an example, if you contributed the household maximum of $5,000 in a year and fall into the average household tax bracket (22% Federal, 5% State) for most Kentucky families, you might expect to save roughly $1,350 a year in Federal & State taxes alone and up to $1,732 if you include the Social Security and Medicare tax.
Drawbacks of enrolling?

Dependent Care FSA’s are “use-it-or-lose-it” accounts. The money you contribute each year cannot be rolled over into the next year. Families must be careful not to contribute more than they expect to pay in child care expenses for that given year.

Families must also be careful to keep good records/receipts of their child care expenses and also ensure that their child care expenses meet the qualifications for reimbursement (i.e. child care provided by someone outside of your family, etc.).

What you should consider before enrolling?

The first question to ask yourself is “will I be paying child care/dependent care expenses next year?”. If the answer is “yes”, it becomes important to start estimating how much you expect to spend in that year so that you prevent over-contributing to the account.

The final and more difficult question to consider is “will it be more beneficial to save into a Dependent Care FSA or take the Child Care Tax Credit?“. Unfortunately, that answer is beyond the scope of this post. While tax saving is important, it’s also important to consider how this decision fits into your overall financial plan. The decision to enroll or not enroll in a Dependent Care FSA should ultimately be made on an individual basis with the help of your CPA and/or financial planner. At the very least though, it should be part of the conversation.