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FI Weekly – March 23, 2021

Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Disclosures.

PSA: Tax Filing Deadline Extended

The IRS just extended the filing date of your federal income tax return from April 15 to May 17, 2021. I was pleasantly surprised to see this from the IRS: “Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed.” 

This is an extension of time to file AND pay for 2020. 

If you’re self-employed or otherwise pay quarterly estimated tax payments, keep in mind your 2021 Q1 payment is still due April 15th. 

This Nerd Wallet article provides further detail and also indicates your deadline for IRA and HSA contributions is extended to 5/17 as well! 

Keep an eye on your state’s filing deadline as many states might move the deadline back in response to the fed’s change. 

Tonight’s Live Episode: College Alternatives

I received such overwhelming feedback on last week’s section about Google moving forward with their Certificate Program as a college alternative that we realized this was a pain point that needed further exploration. 

Because of this, our team completely updated the “Should You Go to College” article on Choosefi.com and Jonathan and I decided to dedicate tonight’s Live Podcast Recording to college alternatives. 

We’d love for you to join us tonight at 7:30pm EST for this live recording. You can send in voicemail questions during the recording that we can respond to live on the show. 

I think Google’s move is a turning point in the world of higher education and we all need to be aware of the changing landscape. On the shortlist of industries in dire need of disruption, higher education ranks right up there with healthcare. These are trillion-dollar industries that seem almost intractably broken, but it might just take one innovator with a reputation like Google’s to break the stranglehold. 

Speaking of Healthcare…

I witnessed firsthand this past week just how broken the system is: I had a CT Scan in February and did everything in my power to get a real price before I had the test. I spent well over an hour on the phone with the hospital and my insurance company and they could not tell me what I would wind up paying out of pocket. 

All I knew was the gross charge was $2,093 but I couldn’t know what I would actually have to pay after the “negotiated discount.” And pay I’d have to, since I have an ultra-high deductible insurance plan. 

The bill came back at….$2,093. Not even $1 of discount, which was shocking. 

After another 2 hours on the phone with the hospital and insurance company, I was able to get it down to $1,502 and the insurance representative gave me a piece of advice: Don’t go to a hospital or any facility associated with a hospital, to get a test of this type. Their negotiated amount is 3x higher than a standalone facility! 

So, I basically paid $1,000+ extra for absolutely nothing. Just the name on the door of the facility. 

Luckily, I can “afford” it and this didn’t ruin me, but this would ruin many families and it just isn’t right. 

I found two resources that can help those of us with high deductible plans, or those who just want some certainty as to what they are paying: 

  • MDSave.com: You can shop local providers and buy your health insurance procedure in advance with price certainty. With the “CPT Code” for my scan in place, I realized that I could have driven an hour and had the same test done for $297 from a reputable facility. 
  • Ulta Lab Tests: I was able to select a la carte lab testing at a very reasonable price for some recent blood work. It only cost me about ~$30 out of pocket, which included the fee to Quest Diagnostics for the blood draw. It was easy to use and I got my results quickly! 

ChooseFI Community Taking Action This Week

  • Sam said, “I found this community about a year ago and have done whatever I can to head in the direction of FI. I have definitely done more than just 1% since then. Here are just a few, I opened a Chase credit card and started my travel rewards journey (my wife took a flight this weekend for a retreat for free), I put 15% a year in my 403b, max out my new Roth IRA, put $100 a month in my new Fundrise account, and give 15% to the local church and other missionaries around the world. We also are renting out our old home back in the states and I am looking into other streams of income.” 
  • Sarah said, “I was so excited I had to share as I think this is finally newsletter-worthy! My company 401k had a terrible AUM fee of 1%. The lowest expense ratio was also 0.57%. I complained and was told as a small company it was the best we could do. Last October, I took a vacation day for my 40th birthday and did conference calls with 3 small business 401k providers. I sent all the info to my bosses and received no response. I then proceeded to follow up once a month with no reply. Finally, in January they said they were researching it. Today they told me they won’t make the formal announcement yet, but we are switching to Vanguard!!!!!!! I’m really proud of accomplishing this because none of my coworkers even know or care how bad our fees were. I know the only reason they made this change is because I stood up and wouldn’t let it go.” 
  • Kathy said, “I started listening to Choose FI in December 2020 as I needed something to listen to and from work. I was so impressed with it I bought myself the Choose FI book. I have been working hard as a single mom of 1 to make sure there will be a point when I can retire and have fun. I have done two things in the last month to make my life 1% better. I cancelled my gym membership. I decided I did better just doing it at home and have been trying different apps for the trial period. I also moved my IRA from a broker to M1 Finance. I figured I could pick an index fund or even a couple small caps, compared to paying $350-$375 a quarter to a broker who is not really doing anything for me. Thanks guys and I look forward to continuing to listen to your podcast.” 
  • Leslie said, “My husband and I are saving and investing 50-70% of our income each month since he deployed in November. We’ve become more focused and driven in the last year, and have tripled our net worth since paying off debt and finding ChooseFI. We truly get excited to talk about money and our shared financial successes and future goals. We cannot wait to see how our lives benefit later from our savings rate now. This isn’t the “1% better”, this might be 100%.” 
  • Beverly said, “Today I am paying off my 30-year mortgage (5.875%) after 17 years. This makes me completely debt free! I’ll use the money I would have paid all year to max out my 2020 and 2021 IRAs and my 401K all for the first time! Turning 40 this year is feeling freeing!” 

 

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Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Disclosures.

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