Depending on who you talk to, barbecue sauces have been around since the days of the American colonies.
Wikipedia claims that the first commercial barbecue sauce appeared around 1909. I know; please don't grill me on my source, folks.
And while most, but not all, barbecue sauces include some secret blend of ketchup, mustard, vinegar, sugar, onion, and garlic, in the United States there are a multitude of different barbecue sauce styles. For example, there's Kansas City, Memphis, Texas and Alabama styles. There's also South Carolina Sauce, East Carolina Mustard Sauce, and even something called a Lexington Dip, which if you ask me, sounds more like a dance move than a barbecue sauce.
Obviously, it's a matter of personal preference, but one thing is certain: there are as many barbecue sauces out there as there are opinions as to which one reigns supreme. If you don't believe me, walk down the barbecue sauce aisle at your local supermarket.
With that in mind, I figured what better reason to conduct yet another of my completely unscientific blind taste-test experiments?
How the Test Was Conducted
As with most of my other taste tests, I recruited a bunch of hungry family members for my expert panel. This time everyone convened in San Diego for a summer cookout at my cousin Kevin's house.
With the panel in place, Kevin and I barbecued up a whole bunch of chicken wings and the candidate sauces were applied from unmarked bowls.
After tasting a slathered barbecue chicken wing, the experts were asked to rank each sauce on a simple four-point scale -- four points for their favorites or as few as one point for those they didn't like at all. The panel was also free to note any accompanying comments they had regarding each sample.
The Expert Panel
Before we get to the results, let's once again meet our distinguished panel of experts:
Aunt Doris
Birthplace: London, England
Age: Unless you're the Queen, it's none of your darn business.
Best advice ever given to her: Shut up! (Doris only gives advice nowadays.)
Dad
Birthplace: Youngstown, Ohio
Age: 74
Best advice ever given to him: Know what your first priority in life is.
Tony
Birthplace: New Haven, Connecticut
Age: 68
Best advice ever given to him: If it sounds too good to be true, then it is.
.
Mom
Birthplace: Youngstown, Ohio
Age: 70
Best advice ever given to her: "I'm so old I don't remember."
Rose
Birthplace: Los Angeles, California
Age: What Aunt Doris said.
Best advice ever given to her: Don't ever get old. (Good luck with that. Right, Mom?)
Kevin
Birthplace: Youngstown, Ohio
Age: 58
Best advice ever given to him: Read the four Gospels. (And for you atheists: measure twice, cut once.)
Chris
Birthplace: Hemet, California
Age: As old as her tongue, but not as old as her teeth.
Best advice ever given to her: Obey God and leave all the consequences to Him.
The Honeybee
Birthplace: Whittier, California
Age: 43
Best advice ever given to her: Your husband Len is always right. (Okay, you got me. I made that one up.)
Evan
Birthplace: Escondido, California
Age: 32
Best advice ever given to him: Never quit!
Matthew
Birthplace: Fontana, California
Age: 14
Best advice ever given to him: Get off the Xbox and go play outside.
Nina
Birthplace: Fontana, California
Age: 11
Best advice ever given to her: Remember to wash your hands.
By the way, for the first time ever, my dog, Major, was unceremoniously left off the tasting panel. Don't worry; he'll get over it.
Introducing The Barbecue Sauce Competitors
While my supermarket had a score of barbecue sauces to choose from, I selected the "Original" varieties of the following seven brands: Bull's-Eye, Hunt's, KC Masterpiece, Jack Daniel's, Tony Roma's, the Albertsons store-brand and, my family's personal favorite, Sweet Baby Ray's.
Here now, in reverse order from worst to first, are the completely unscientific barbecue sauce blind taste test results, based upon the inputs of my expert panel:
7. Sweet Baby Ray's Original Barbecue Sauce
Price per ounce: $0.21
Panel Scoring: 23 points
Average Score (4-point scale): 2.1
Judges Who Gave It a Top Rating: 0
Judges Who Thought It Stunk: 1
Well, this is embarrassing. Apparently, our so-called family favorite isn't quite as good as we thought it was. Even more surprising, not a single panel member ranked this as a top sauce, which is problematic considering it was the second most expensive brand sampled. Ironically, the Honeybee, who usually swears by Ray's, complained that, "it didn't have much flavor." Another self-proclaimed Ray's fan, Kevin, gave it demerits for being sugary. My cousin Evan suggested that the poor rankings were because Sweet Baby Ray's sauce goes better with pork.
6. Albertsons Original Barbecue Sauce
Price per ounce: $0.17
Panel Scoring: 27 points
Average Score (4-point scale): 2.5
Judges Who Gave It a Top Rating: 1
Judges Who Thought It Stunk: 3
Nina was the only member of the panel to give the store-brand sauce a top mark, noting it was "tangy and addictive." You know what? I'm moving on -- I'm still in shock Ray's came in last place.
5. Tony Roma's Original Barbecue Sauce
Price per ounce: $0.19
Panel Scoring: 27 points
Average Score (4-point scale): 2.5
Judges Who Gave It a Top Rating: 4
Judges Who Thought It Stunk: 4
Four members thought enough of Tony Roma's to give the sauce top marks; Chris thought it had a "great barbecue flavor" and Mom praised its "really good taste." But just as many panelists thought otherwise. Kevin ribbed the Tony Roma's barbecue sauce for tasting "artificial, although not bad for colored gelatin." The Honeybee piled on by remarking that it tasted so much like ketchup that it was better-suited for a weenie roast. Then you have my handyman father-in-law, Tony, who summed it more succinctly: "It sucked."
4. KC Masterpiece Original Barbecue Sauce
Price per ounce: $0.19
Panel Scoring: 28 points
Average Score (4-point scale): 2.5
Judges Who Gave It a Top Rating: 1
Judges Who Thought It Stunk: 2
KC Masterpiece is generally recognized as one of the better mainstream barbecue sauces. However, for this test it ended up looking more like, well, just a decent lithograph. The Honeybee was the only panelist to give KC Masterpiece top honors, but Kevin enjoyed the sauce too, noting its pleasing "woody aroma." In a dissenting opinion, however, Chris beefed that the barbecue sauce simply tasted too much like ketchup.
3. Bull's-Eye Original Barbecue Sauce
Price per ounce: $0.19
Panel Scoring: 30 points
Average Score (4-point scale): 2.7
Judges Who Gave It a Top Rating: 2
Judges Who Thought It Stunk: 1
This barbecue sauce got blue ribbons from both my kids. Matthew, in particular, thought the Bull's-Eye brand hit the mark for its "smokey flavor."
2. Jack Daniel's Original Barbecue Sauce
Price per ounce: $0.22 (the most expensive of all brands tested)
Panel Scoring: 30 points
Average Score (4-point scale): 2.7
Judges Who Gave It a Top Rating: 5
Judges Who Thought It Stunk: 3
Jack Daniel's barbecue sauce is manufactured by Heinz, and it got more top-scores than any of the other competitors. Nina noted that she would give it a higher score if she could. Meanwhile, both Aunt Doris and the Honeybee -- who coincidentally happens to a big fan of Jack Daniel's whiskey -- praised JD's barbecue sauce for its distinctive hickory flavor. Interestingly, those who didn't like the Jack Daniel's sauce dinged it for being just a bit too hickory flavored.
1. Hunt's Original Barbecue Sauce
Price per ounce: $0.11 (the least expensive of all brands tested)
Panel Scoring: 32 points
Average Score (4-point scale): 2.9
Judges Who Gave It a Top Rating: 4
Judges Who Thought It Stunk: 1
Ah, the grill of victory! Incredibly, as with my ketchup taste test, the least expensive brand in the survey once again came out on top. Evan thought the Hunt's had a delicious sweetness to it. Rose agreed, giving it top marks for being "sweet, but not overly so." Dad liked Hunt's savory mix of spices, Kevin thought it was "perfect," and Tony thought it had a "great BBQ flavor." The only one who flat out didn't like the Hunt's was Nina, who remarked that the flavor was "just wrong."
I Know What You're Thinking ...
Hunt's barbecue sauce? Are you kidding me?
Say what you will about this experiment's unscientific methods, but it was a fair fight. After all, the blind taste test goes a long way toward eliminating preconceived notions and biases that would otherwise subtly influence the panel members' decisions.
Is Hunt's barbecue sauce "sexy?" Um, no. But in the end, Hunt's was not only the least expensive brand of all those sampled, but my expert panel also found it to be the best tasting barbecue sauce of them all -- and that's good enough for me.
Photo Credit: Public Domain Photos ...
Continue reading My BBQ Sauce Taste Test: My Family Bucks Conventional Wisdom (Again)
Dogs and Old Cars: Why Both Are Worthy Of Being Man’s Best Friend
I was surfing the Internet this week when I stumbled upon a brilliant essay by The Washington Post's Gene Weingarten on why old dogs make the best dogs. In it, Weingarten astutely observed:
"It's no big deal to love a dog; they make it so easy for ...
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How to Choose a Reasonable Health Care Plan on a Budget
by Patricia Walling
Every year there are millions of Americans who struggle to afford health care. This can be due to insurance companies raising premiums, but there can be other reasons too. For example, many people who are either unemployed or self-employed (such as per diem nurses or those in other health care professions like medical coding) are unable to get the discounts that many companies offer to their employees. Many employers who have simply stopped offering health care as a benefit. As a result, many people struggle to find a reasonable health care plan that fits within their budget.
Luckily, there are options available that can help provide yourself with reasonably priced health coverage. And though it may cost a little more than you'd like, paying for health insurance before you get sick or injured is usually a much better alternative than paying medical bills out of pocket. Here are a few basic tips to consider when you're looking to choose a reasonable health care plan on a budget.
Stick to the Basics
Basic coverage policies differ a little bit depending on the insurance provider. Of course, these are no-frills policies that generally cover doctor visits and reduce the amount the policy holder has to pay for prescription medication. That doesn't mean they aren't worth it; when you are sick, one trip to the emergency room or a walk-in clinic can cost more than six months of coverage.
Consider an HMO Plan
If you visit the doctor often, an HMO may be the most cost-effective way to manage your health care as preventive services like physicals are often provided at no extra cost. An HMO is where you use in-network doctors. Thus it is important to remember that even though your favorite doctor may be right around the corner, if he is not in the network you probably won't be able to see him.
Consider High Deductible Plans
Each year, more and more people are choosing to go with high-deductible plans because they are generally very affordable. These plans are meant to protect you from a catastrophic injury or illness. Because these plans have very high deductibles, they will not protect you from having to pay out of pocket expenses for minor injuries and illnesses.
Shop Around
Always shop your options. Although many insurance companies advertise that they have low prices, but you won’t really know if they’re truly low unless you get comparison rates. Find out what the rates are for at least two or three insurance providers and then make your decision once you have some actual facts.
Pay on Time
No matter which option you choose, always make sure to budget properly and pay your premium on time. If you neglect to pay on time, your insurance provider could pause or cancel your coverage. Timing is everything and chances are when your coverage is suspended is when you will need it most.
Purchasing health insurance can be an expensive undertaking. The choices you make will affect your future should you get sick or injured, so it is crucial to chose wisely when selecting a plan for you and your family.
Photo Credit: rosmary ...
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How Being Absentminded Resulted In A $2750 Year-End Windfall
At least I'm calling it a windfall. Let me explain.
You see, if I leave a twenty dollar bill in a winter jacket only to rediscover it after it has been hanging in the closet for nine months, that's a windfall.
Now I can hear a lot of you out ...
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The Penner Awards: The 10 Craziest Money Blunders of 2010
As 2010 comes to a close, I think it is only appropriate that I share my picks for the ten dumbest money stories of the past year, highlighting some of the most dumbfounding displays of numismatical naivete and financial ineptitude known to man.
That's right, folks. Welcome to the inaugural edition of the Penner awards! Ba-da-bing!
Now I know what you're thinking: Hey, Len, so why on earth should you be the one to give out such a prestigious award?
Well, as I see it, I have two very good reasons: 1) I've made plenty of stupid money mistakes myself over the years; and 2) It's that barren no-man's land between Christmas and New Year's Day where precious readers are few and far between, and so I'm really desperate for any angle right now that might bring in an extra pair of eyeballs or two. (So please tell your friends all about this piece, would ya?)
Now let's give out some Penners!
1. The Bucket List Blunder
Recipient: Dave Ismay
Background: The 64-year-old comedian wasn't amused after being told by his doctor that he had an incurable liver disease and only three months to live. Undaunted, he prepared a bucket list and was well on the way to spending his life savings -- including a $40,500 Mercedes -- when 10 weeks later he got the news that the original terminal diagnosis was in error and that his condition was treatable. Oops.
The Moral of the Story: Always be sure to get a second opinion before spending your life savings.
2. The Curse of the Cursed Money Curse (or Something Like That)
Recipients: Laura Santini, Rose Santini, an unnamed woman from Park Ridge, Illinois, and an unnamed couple from South Holland, Illinois
Background: A mother-and-daughter fortune telling team were arrested after allegedly convincing two, well, to be kind let's just say "unwitting," parties to turn over a combined total of more than $100,000 because their money was supposedly cursed. The fortune tellers promised that they would "cleanse" the money and then return it. Instead, they allegedly absconded with the cash and took off to Scottsdale, Arizona. Imagine that.
The Moral of the Story: P.T. Barnum was right.
3. The $10 Million Dollar Man (Not)
Recipient: Nick Martin
Background: Man inherits $10 million (after taxes) and immediately goes on a spending binge -- for the next ten years. Today, at age 59, he is now essentially broke and on the verge of bankruptcy.
The Moral of the Story: Apparently, ten million dollars doesn't go as far as it used to.
4. And You Thought Government Pensions Were the Bomb
Recipients: Robert Rizzo, Randy Adams, Angela Spaccia, Oscar Hernandez, et al.
Background: This past summer, in a stunning example of government corruption run amok, the Los Angeles Times revealed that Rizzo was drawing a salary of $800,000 per year as the city manager of tiny Bell, California -- a 2.5 square mile town in Los Angeles County. The Times also found that Adams was earning $457,000 per year as the police chief, and Spaccia almost $400,000 as the assistant city manager. Even the city council members were generously paid, with most members earning $100,000 per year for the part-time positions.
The Moral of the Story: In a democracy, people get the government they deserve.
5. The IRS Finally Puts "Passenger 57" on Hiatus
Recipient: Wesley Snipes
Background: After being convicted in 2008 for federal tax evasion, Snipes finally began his three-year prison sentence. The actor failed to pay any income taxes for a decade, including $38 million in income earned between 1999 and 2004 alone.
The Moral of the Story: You can protest the federal income tax law all you want but, if you're smart, you'll still pay up.
6. The Man Who Gambled On His Life -- and Lost
Recipient: Jon Matthews
Background: After being diagnosed with mesothelioma in April 2006 and told he would be dead by the end of the year, Matthews placed a $160 wager with a British bookie that he would still be alive in June of 2008. He made it and, at 50-1 odds, won $8000. Matthews then made another $160 wager, with the same odds, that he'd live to see June 2009. He did, winning another $8000 in the process. Feeling pretty good about himself, Matthews then decided to press his luck with another $160 bet -- this time with odds of 100-1 -- that would net him a cool $16,000 assuming he could make it to June 2010. Unfortunately for Matthews, he died a month short of the payoff date.
The Moral of the Story: Kenny Rogers wasn't kidding when he said "you've got to know when to fold 'em."
7. One Focked Up Movie
Recipients: Everybody and anybody who was stupid enough to buy a movie ticket to see Little Fockers
Background: My father-in-law, Tony, warned us that the movie reviews for Little Fockers were terrible. Did the Honeybee and I listen to his sage advice? Nooooooooo! After plucking down a pretty penny at the theater, we got to see for ourselves that Little Fockers was, indeed, an absolute and embarrassing stink bomb. At press time, Rotten Tomatoes' tomatometer for Little Fockers was only at 11 percent. Eleven percent! In hindsight it's all so obvious; a movie franchise usually jumps the shark by the second sequel anyway. I think movie reviewer Matt Brunson said it best when he noted that, "Enough is enough. This franchise has run its course and made its millions, but now it's time for it to fock off." Amen, brother.
The Moral of the Story: When it comes to movie reviews, never doubt the tomatometer -- or your father-in-law. Never.
8. Creative Ways to Lose Your Life Savings (Part 1)
Recipient: An unnamed 68 year old man from Southend, Essex, Britain
Background: A man lost approximately $120,000 when he placed it on the roof of his car and then drove off. The man used to keep the money under his bed, but eventually decided the car was more secure. According to the man, "We found some of the small bags empty in the street, so it’s pretty certain someone found it. I don’t hold out much hope of getting it back." Heh. Ya think?
The Moral of the Story: It's official. Storing your life savings under the bed is definitely much safer than keeping it on the roof of your car -- especially if you plan on driving anywhere.
9. Creative Ways to Lose Your Life Savings (Part 2)
Recipients: An unnamed elderly couple from Melbourne, Australia
Background: A man sewed his life savings of approximately $90,000 into the lining of an old suitcase, but didn't tell his wife. His wife ultimately donated the suitcase to a Salvation Army store. By the time the husband found out what happened, the suitcase was already sold. Thankfully, most of the money was eventually recovered.
The Moral of the Story: It never pays to keep secrets from the wife. Just sayin'.
10. The $1500 Wiener Wager
Recipient: Colin Moffatt
Background: This past May, Moffatt lost a $1500 bet after his friend successfully downed 450 hot dogs in a single month. For the record, his friend ended up spending about $400 on hot dogs and buns.
The Moral of the Story: It's probably safe to say Moffatt didn't relish paying the money but, hey, a bet is a bet. ...
Continue reading The Penner Awards: The 10 Craziest Money Blunders of 2010
Come On, People. Quit Maligning the Plastic Grocery Bag!
As a Southern California native, I took great interest in the Los Angeles County Board of Supervisors decision to save the world by passing an ordinance that bans plastic shopping bags at grocery stores, pharmacies and convenience stores.
The ...
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Why Marriage Makes It So Hard to Control Remodeling Costs. (Well, Kinda Sorta.)
As I've previously mentioned, the Penzo household is in the middle of a long-awaited home renovation project with a reliable contractor.
Originally, it was supposed to be a fairly modest kitchen renovation that involved replacing our porcelain ...
Continue reading Why Marriage Makes It So Hard to Control Remodeling Costs. (Well, Kinda Sorta.)
The Ugly Truth: Why Big Spenders Are Terrible In Bed
It is a truism that most big spenders are showoffs; they feed off attention.
Ironically, while your typical big spender works 24/7 trying to impress others, most of the time they rarely do so.
There is a small segment of the population, ...
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Expedia, Orbitz, Priceline and Others: What’s the Best Travel Search Engine?
I can't believe I'm saying this, but our annual summer vacation is right around the corner. Weren't we in the throes of a Little Ice Age just last month?
Ah, well.
I'd like to say we were going back to Maui, but unfortunately I drew the short ...
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My Store-Brand vs. Name-Brand Blind Taste-Test Experiment #2
Are name-brand groceries really worth the extra cost when alternative cheaper store-brand groceries are available? More specifically, when it comes to edible products, does the quality and taste of name-brand products always justify the price premium ...
Continue reading My Store-Brand vs. Name-Brand Blind Taste-Test Experiment #2
10 Off-the-Wall Gifts for Open-Minded People
Hey! You know what I haven't seen lately on the blogosphere? A personal finance post on great gift ideas! ;-)
I'm kidding. Kinda. After all, there are already some great pieces on Christmas gift ideas for military members.
So... Are you tired ...
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10 Financial Lessons We Can Learn From Baseball
1. Take Advantage of Opportunities when they Present Themselves - After the 2008 season, the New York Yankees signed CC Sabathia and AJ Burnett on nine-figure multi-year deals. Are these two pitchers the best pitchers around? Probably not (neither ...
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Talkin’ Turkey: Evaluating My Thanksgiving Dinner Scorecard
This year Thanksgiving dinner is at my house. We'll be serving dinner for 16 people including my sister and her family, my mom and dad and the Honeybee's folks.
You know, since he came out to visit a few weeks ago, my father-in-law Tony has taken over a lot of the chores around the house, including fixing the water heater (and saving me $400 in the process).
It's not that I'm lazy, mind you. It's just that Tony likes to keep busy, so who am I to stop him if he wants to tighten a few loose screws, paint a bedroom or two, and perhaps even do a major renovation to my bathroom and/or kitchen while he is vacationing here?
Needless to say, that's why I made my go-getter father-in-law the executive chef in charge of preparing this year's Thanksgiving dinner.
Hey, what kind of guy do you think I am? I'm certainly not prepared to ruin Tony's Thanksgiving by telling him his only job is to sit down all day and do nothing but watch some lousy football games and stuff himself silly with turkey and mashed potatoes - Tony is a guest in my home, after all.
Besides, I'm going to be Tony's trusty sous chef. Before you laugh too hard, you need to know that I am normally the family cook - I can more than handle myself in the kitchen. And although that didn't sound quite right, I trust you know what I mean.
As for the menu, after much deliberation, Tony and I decided to keep things traditional and settled on the following menu:
Turkey
Herb stuffing
Mashed potatoes
Yams
Green Beans
Salad
Dinner Rolls
Dessert (Pumpkin, Apple, and Cherry Pie)
Sparkling Apple Cider
So with the menu in hand Tony and I made a grocery list and then set off to do some grocery shopping.
We brought the Honeybee along with us too because we needed somebody to drive.
Our first stop was at our local warehouse-type store, where we bought the turkey, a monster apple pie, and a couple of other items. For the record, the turkeys at the warehouse-type store were not only fresh, as opposed to frozen, but they were also about ten cents per pound cheaper.
After that, we went to our neighborhood supermarket, where we bought the rest of the stuff we'd need for the Thanksgiving feast.
As you can see, off to the right I have included a breakdown of our grocery bill. Keep in mind that a couple of the items I bought at the warehouse store have been pro-rated to account for the fact that we only use a portion of what we buy for the actual dinner. So, for example, although we bought 48 ounces of canned olives in eight cans, I'm only counting two cans (12 oz.) on my Thanksgiving dinner scorecard.
In total we spent just over one-hundred dollars for our Thanksgiving meal this year, which is very reasonable for 16 people. We didn't make a conscious effort to make the meal as cheaply as possible - Thanksgiving dinner is a meal I prefer not to scrimp on. However, if we did I am certain we could have shaved the total grocery bill by probably 20% by focusing on buying only store-brand items. Then again, keep in mind that, as my name-brand vs. store-brand taste test experiment showed, you can't assume anything with respect to taste and quality - sometimes the name brand is better, and other times, the store brand label is actually better.
A Few Observations...
After looking at this scorecard, I couldn't help but notice a few interesting facts:
1. The biggest expense for the entire meal was NOT the turkey. "But, Len, how could that be?" Maybe it's because when it comes to Thanksgiving dinner, my family considers the meal's most important course to be dessert. Sad, I know. Anyway, after purchasing almost eight pounds of pie and the mandatory whipped cream, we spent a whopping $22.16. Meanwhile, the 22-pound turkey we bought cost us less than twenty bucks. I don't know what is more disturbing: The fact that we bought over $20 worth of dessert, or the little voice inside my head that keeps telling me eight pounds of pie might not be enough.
2. You can get some really awesome deals at your local grocery store. Did you notice the price we paid for those russet potatoes? Ten cents per pound is an absolutely ridiculous deal to be offered by any grocery store not based in Idaho. Especially when you compare that to the price we paid for the potato chips, which comes out to $2.79 per pound if you do the math.
3. It's always cheaper to eat at home. I dare you to find a restaurant that will put out an awesome Thanksgiving dinner with all the trimmings, plus appetizers, for 16 people in a family-friendly and comfortable atmosphere for just over $102. And that's before the tip.
On behalf of my entire family, we'd like to wish you all a very safe and Happy Thanksgiving! :-)
Oh, and if you find you happen to need a little extra pie on Thanksgiving Day, drop me a line - we've got plenty. I think. ;-)
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Continue reading Talkin’ Turkey: Evaluating My Thanksgiving Dinner Scorecard
Flexible Spending Accounts Provide Free Money. Why Pass It Up?
The relentless rise of health care costs can really put a strain on your household budget. Even with an insurance plan, health care expenses can add up when you consider most people still have to pay deductibles, copayments and other items not covered by insurance.
A great way to offset these rising costs is through the use of flexible spending accounts (or FSAs). FSAs are employer-sponsored accounts that allow employees to make pre-tax contributions. FSAs provide tax savings that help offset health care and dependent day care expenses.
Any contributions you make to your FSA can be used to pay for out-of-pocket medical expenses that are not covered by your health insurance plan - so by taking advantage of FSAs you are, in essence, allowing the government to subsidize a portion of your unreimbursed medical expenses.
How FSAs Work
Let's say after sitting down and thinking it over, you estimate all of your unreimbursed medical expenses for the coming year will be $1000. At enrollment time, you instruct your employer that you wish to put $1000 in your FSA. Your employer will then deduct a portion of that amount from your paycheck each week (in this case, $19.23) before taxes.
At anytime during the year, you can tap the money in your FSA to cover your qualifying unreimbursed medical expenses, even if your account isn't yet "fully funded." In other words, if your FSA contribution for 2010 is $1000, you can withdraw all $1000 to pay for qualifying unreimbursed expenses incurred during the first week of January, even though you've only contributed $19.23 into the account.
How do you "tap" the money? I pay the fees in advance and then submit the receipts to my plan administrator who then issues me a check. But I also have the option of using a special FSA debit card as well that will make the payments in real time.
The higher your marginal tax rate, and the more you put in your FSA, the more money you'll save. Somebody that puts $3000 into an FSA and sits in a 25% tax bracket is essentially saving themselves $750 every year.
That's $750 of free money - so why would anybody pass that up?
Fear is a Lame Excuse for Leaving Free Money on the Table
As this New York Times article shows, most people fail to take advantage of FSAs because employee contributions to an FSA are "use-it-or-lose-it.” What that means is if you fail to spend the money in the account before the coverage period ends, any unused funds are lost.
What a lame excuse.
Actually, it's a pitiful excuse - but a lot of people use it anyway. The Times article notes that although 85 percent of companies offer FSAs, only 22 percent of employees take advantage of them.
How sad.
I can understand being afraid of leaving free money on a table if it is being guarded by an angry rattlesnake. But to throw away free money simply because you're afraid you might not meet some silly little requirement is really inexcusable - especially when you consider all it takes for most folks to avoid that scenario is 30 minutes of their time so they can plan out and estimate in advance their unreimbursed medical expenses for the following year.
With two kids currently wearing dental braces, my unreimbursed orthodontia bills more than cover my $3000 annual FSA maximum limit imposed by my employer. But even when the kids weren't in the midst of their current orthodontia program, we had little trouble covering the maximum. When you consider eye glasses, contact lenses, saline solution, dentist and doctor copays, unreimbursed prescriptions, cold and other off-the-shelf medicines, band aids, and other qualifying expenses for a family of four, it didn't take much effort to get there.
Coverage periods depend on your employer’s specific plan, although most plans follow the calendar year. My company's plan even offers a very generous three-month grace period for filing claims.
If you are still worried about losing money, I would recommend you start slowly and gradually increase your FSA limit each year until you feel more comfortable with the process.
That's what I did.
The first year I took advantage of an FSA I only signed up for $500. That year I had reached $500 in unreimbursed expenses by June and I remember wishing I had signed-up to put more in my account. The following year I upped my contribution to $1000. By the third year, I doubled it again. I am now contributing $3000 to my FSA and it is a very important benefit I count on every year to help me save money.
Another benefit of the FSA is it acts as a quasi-savings device. We usually compile all of our receipts in a special file and then request our entire reimbursement check all at once sometime in the latter-half of the year. The $3000 check makes for a nice "windfall bonus" that we use to pay for big purchases.
What Are Qualifying Expenses?
Although there are exceptions, the list of qualifying expenses is usually big enough to drive an ambulance through. For a complete list of deductible medical expenses, check out IRS Publication 502. But, as cited in that Times article, here is an example of how varied the expenses are:
- Over-the-counter medicines of all types
- Cough drops
- Calamine lotion
- Mental health therapy
- Lab tests
- Dental braces
- Lasik surgery
- Aids to help you stop smoking
Just keep in mind that, as of 2011, over-the-counter medications must accompany a note from your doctor to qualify as an allowable expense.
Keep in Mind Your Employer Can Make Exceptions!
It is important to know that employers are free to choose what their FSAs will cover. The Times notes that while the vast majority of firms simply follow the IRS rules, some do make exclusions, so check with your employer's benefits department to see how your company varies from the IRS list of approved expenses.
In Conclusion...
FSAs are something to be embraced, not feared. They not only reduce your tax liability, they also can act as a de facto quasi-savings plan. Yes, if you fail to plan, you may end up losing a portion of your contribution - but that is a poor excuse for passing up one of the more valuable benefits that your employer provides to you.
All it takes is a small amount of planning on your part. :-)
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Killer Asteroid? Personal Finance Strategies For the End Times
You're traveling through another dimension, a dimension not only of sight and sound, but of mind. A journey into a wondrous land whose boundaries are that of imagination. That's the sign post up ahead, your next stop...The Personal Finance Twilight Zone.
So I was reading this story yesterday about a man who quit his laboratory job for a French oil company in 2006 so he could begin preparing for what he believes will be the upcoming end of the world. In fact, he basically sold everything he had and invested his money and time in trying to prepare for the coming apocalypse.
Imagine that.
This guy is absolutely convinced the world will end on December 21, 2012.
His evidence? An ancient Maya cyclical calendar that runs out on that date, supposedly with catastrophic consequences. He also refers to the ancient Egyptians, who, he claims, saw 2012 as a year of great change. And he points to a NASA prediction of a sharp increase in the number of sunspots and sun flares for 2012; he believes the spots will lead to widespread electrical failures and satellite disruptions.
Is this guy up a tree? Probably. Okay - yes, yes. He's a total nut job.
What is really sad is if the end of the world fails to come in 2012 as he expects, the only Armageddon this guy is going to be dealing with is the one that relates to his personal finances.
And that's too bad for him.
Yeah. Heh. What a kook. Sheesh. Some people.
Yep, yep, yep. (sigh)
Then again...
What if he is right? What if the world was going to end?
Such a scenario got me thinking about how I would look at my finances if I knew the exact day the world was going to end. Would I handle them any differently than I do today?
For me, the answer is, "it depends on the time horizon."
Let's first assume we did know with total certainty that the world was doomed to end, but instead of the final day coming on December 21, 2012, it was set to arrive twenty years later in 2032.
Exactly how would the world end? Your guess is as good as mine, but for the sake of argument, let's assume astronomers identified a very large killer asteroid that was virtually guaranteed to collide with Earth on December 21, 2032. And unlike what we saw in the movie Armageddon, Bruce Willis and Billy Bob Thornton wouldn't be available to save the Earth from total annihilation.
On December 21, 2032, it's all over - except for the cockroaches.
Boom boom...out go the lights.
Such a scenario begs a lot of questions with respect to how we would handle our personal finances.
For example, would you quit or change your current job? Would you change how you handle your 401(k) contributions? What would you invest in? Would there be anything worth investing in?
What about your obligations to your creditors? Would you continue paying your mortgage and credit card bills?
And would you sell your house and become a renter because owning real estate would look a lot less attractive? (And you thought you had it bad when you found out your house sits on land subject to an emphyteutic lease.)
After thinking about this particular scenario for a long time I came to the conclusion that, for me, very little would change.
I would keep my job, and I would also continue to contribute to my 401(k) just as I currently do. Assuming I knew the exact date that the world would end, I would try to go about my life as usual, saving enough money such that I would have enough to comfortably retire a dozen years in advance of that fateful day.
In terms of how I would spend my money, it would really be no different than if I didn't know a killer asteroid was going to obliterate the planet.
I may be naive here but I also suspect, for the most part, the world would continue functioning in a business-as-usual mode too if for no other reason than it would have no other choice.
Now let's take the other extreme on our time horizon. Let's assume that our ex-lab worker's intuition is absolutely spot-on and our end-of-the-world time line is significantly shorter. Instead of twenty years out, the date of our killer asteroid impact coincides exactly with the end of the Mayan calendar on December 21, 2012.
This time my retirement would obviously be much shorter - but the good news is it would also be much more extravagant! With such a short time line I, like that lab worker, would immediately quit my job and cash in all my chits with the aim of living an extremely comfortable lifestyle between now and the end of 2012.
Of course, I am once again assuming society would maintain some semblance of civility during this time.
As long as that assumption holds true, the goal would be to spend my money like there was (almost) no tomorrow, until my last dollar was spent on December 21, 2012.
I find it just a bit ironic that, as far as my personal finances are concerned, knowing the end of the world was relatively close in time might just allow me to live the opulent lifestyle I would never dream of living otherwise.
So How About You?
How would you handle your finances if you knew the exact date that the world was going to end?
I think the set of potential answers are as wide as the ocean is deep.
And so you there have it. The poles of fear. The extremes of how Earth might conceivably be doomed. Just a minor exercise in the care and feeding of a hypothetical nightmare. Respectfully submitted by all the asteroid watchers... in The Personal Finance Twilight Zone.
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Personal Finance Decisions: The Good, the Bad, and the Ugly
Regular readers know that I absolutely love Clint Eastwood movies. The other day I was watching for the umpteenth time one of my all-time favorites: the classic Sergio Leone spaghetti western The Good, the Bad and the Ugly. While I was watching the ...
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9 Personal Finance Lessons I Learned from Watching The Simpsons
Twenty years ago the series premier of arguably the greatest cartoon ever, The Simpsons, debuted in the United States. Over that time I have watched countless episodes chronicling the lives of Homer, Marge, Bart, and Lisa Simpson and all of their ...
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How to Avoid Neighbor Conflicts When It’s Time for a New Fence (Part 2)
This is the second part of a two-part series. Click here for part one.
As I noted in part one, over the years I have personally talked to several friends of mine who told me they would rather spend a couple hours in the dentist chair having their ...
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How to Avoid Neighbor Conflicts When It’s Time for a New Fence
Being a homeowner has a lot of responsibilities that renters never have to deal with. Many of the responsibilities are no big deal; others can be extremely unpleasant. One of the most painful homeowner tasks is dealing with the neighbors when a ...
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Inflation: Your Four Best Defenses For Preserving Your Wealth
I kicked off this series on inflation with a warning about why all of us should fear inflation and why the US government needs it to take root in our economy. But I'm not the only one who thinks so.
Forbes posted an excellent article on the coming ...
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