Question: TR in Mason: My friend was recently put on leave and he asked me for money (a few thousand dollars). I want to be a good friend, but I don’t know if I’ll ever get that money back. No advice?
A: It’s a dilemma as old as the world – to help a friend, or not? We can only imagine how torn you must feel. So let us help you look at this situation with fresh eyes.
First, take a look at the state of your own finances. Can you even theoretically afford to part with a few thousand dollars? If you were to withdraw that money from a retirement account or an emergency fund, you absolutely shouldn’t go through this. I hope your friend will understand if you tell him that you’re just not in a financial position to help him right now (or, feel free to make us the “bad guy” and tell him that we said you shouldn’t give him the money – we don’t mind).
But let’s say you have the money available and you decide to lend it to your friend. Would your friendship be in danger if he never paid you back? It’s obvious you’re worried about a scenario like this unfolding – so what would you do? Take him to court? Keep pestering him about endless money? Or would you let it slide? Something like that – if ultimately not handled properly – could haunt a friendship forever. One way to avoid this would be to set up a payment plan upfront. Or, don’t think of the money as a loan, but rather think of it as a gift. This way you won’t be disappointed if you never get the money back.
Here’s The Simply Money Point: The fact that you’re even considering lending that money just shows that you’re a good friend. But, hopefully, your friend wouldn’t want you to do anything that could harm your friendship or put your own financial security at risk.
Q: Ross from Pendleton County: I am one of the people who lost their jobs during the pandemic. What should I do regarding health care? Should I use COBRA or buy a plan through an exchange?
A: We are sorry to hear of the loss of your job. It’s a difficult time for many people and knowing what to do about health care is just another headache that can add to the stress. So, before making any decisions, it is important to understand the basic workings of COBRA.
COBRA is an acronym that stands for “Consolidated Omnibus Budget Reconciliation Act”. This is a federal program, first enacted in 1985, that allows any laid-off employee (in a company with more than 20 people) to retain their current health care coverage for up to 18 months.
But COBRA can be expensive: instead of paying only part of your premium (and your employer paying the other part), you would be responsible for 100% of the premium. In addition, there is usually an additional 2% “administrative” fee. All told, that means you could be paying up to five times what you’re used to, according to the Kaiser Family Foundation (a healthcare research firm). Note: If you have a Health Savings Account (HSA), you can use this money to pay your COBRA premium.
Once you know the cost (which you should receive from your former employer in a “COBRA election notice”), you can then compare the costs of public plans offered through the Affordable Care Act on healthcare. gov. You may be eligible for income grants, which will help reduce this premium.
Simply Money’s point is that, of course, cost isn’t the end of the world. If you have a pre-existing condition, want to keep your current doctors, or have already reached your deductible for the year, it may be a good idea to pay for COBRA coverage.
Each week, Nathan Bachrach and Amy Wagner from Allworth Financial answer your questions in their Simply Money column. If you or a friend or family member has a money problem or problem, please feel free to send these questions to [email protected].
The answers are provided for informational purposes only and individuals should consider whether the general recommendations contained in these answers are appropriate for their particular situation based on their investment objectives, financial situation and needs. To the extent a reader has any questions regarding the applicability of any specific matter discussed above to their individual situation, they are encouraged to consult with professional advisor of their choice, including a tax advisor and/or attorney. . Retirement planning services offered by Allworth Financial, an SEC-registered investment adviser. Securities offered by AW Securities, a registered broker/dealer, Member FINRA/SIPC. Call 513-469-7500 or visit allworthfinancial.com.